This originally aired on the Catholic Faith Network’s show CFN Live: https://youtu.be/Uy9_EvlFiFo While most people…
When it comes to deciding how to leave property to your children, it might not be as simple as you think. It will depend on their circumstances and your concerns. Dividing everything into equal shares may seem like the most obvious solution, especially if all your children are doing equally well financially, have similar needs or situations, and are all emotionally capable and responsible.
Equal and Fair are Two Different Things
However, giving each child an identical inheritance might not make the most sense. Equal doesn’t always mean fair, and maintaining sibling relationships is important. What if a child still relies on you financially, has a disability or illness, or is irresponsible with money?
For example, your son is a starving artist with mouths to feed, and your childless daughter has made millions on Wall Street – the temptation is to leave more to him than to her.
That decision, however, can have consequences. There’s a good chance that your daughter might feel hurt. It appears that you are favoring one child over another. You don’t want to leave behind disappointment and resentment when you had good intentions.
Life Circumstances May Change
Estate planning is about considering the long term. Even if your daughter has no children of her own now, she may have them in the future. If you leave her nothing, both she and her children will have nothing to keep your memory alive.
Moreover, anyone’s financial situation can take a sudden turn for the worse. Illness, injury, or natural disaster can strike. Marriages can split. Investment decisions might fail. Assets can be lost or stolen. Credit may dry up. While hopefully none of these gloomy misfortunes will befall your daughter, it may be wiser to provide her with some cushion.
Evaluating Significant Assets
If your assets include real estate and other tangible assets, it is best to determine their value and where your children are located across the country before deciding who gets what. You can explain your decisions to your children so they understand the logic behind them. If they still feel it’s unfair, you can have them sell the property and split the proceeds to avoid conflict.
Consider Gifts Given During Your Lifetime
Have you provided more financial help to one of your children than another? If you’ve helped one with wedding gifts or a down payment on a house, you might want to leave more to the child who has yet to receive those gifts. If you have a child with special needs who can’t care for themselves, they may need more money to provide for medical needs and basic living expenses. This may involve setting aside funds in a special needs trust. Discussing each child’s situation and your plans ensures no one is surprised later.
If you still want to leave your son more than your daughter, sit down with your children and explain why. Even if your daughter might be unhappy to hear it, at least she would have less reason to blame your son later. And you never know, your daughter may completely agree. That love and generosity, on the more-advantaged child’s part, can make everybody happy.
We hope you found this article helpful. If you have questions about how to distribute your childrens’ inheritance, contact our office at 1 (800) 680-1717 and schedule a consultation to discuss your family dynamics and each child’s circumstances. We are happy to offer advice, make recommendations, and update your estate plan to reflect your decisions.