If you are like most parents, you probably plan to leave a fair share of assets to each of your children when you pass. But it might be more complicated than just dividing your assets equally among your kids, because fair doesn’t always mean equal when it comes to estate planning.
Here are a few situations in which you may want to leave your children an unequal but fair share of your assets, and how to accomplish that:
When one child has already received a lifetime gift or financial help: If you have already gifted one of your children significant assets, you may want to account for that in your estate plan. You could do this by:
- Adjusting your estate plan to leave the child who received a lifetime gift a smaller inheritance based on what she or he was already given; or
- Granting each child an equal inheritance and then having the child who received the lifetime gift sign a promissory note stating that she or he will repay the money even after you have passed; or
- You could choose to still leave each of the children an equal share if you want the lifetime gift to be extra, say, if your other children are more financially independent.
When one child has chosen to care for you and/or your spouse as you age: If one of your children has invited you to move in with them or has moved closer to you to help care for you or your spouse as you age, then you may decide to give that child a larger inheritance.
You can work with your estate planning lawyer to adjust your estate plan in order to leave a greater amount to that child.
However, keep in mind that it would be a good idea to speak to all of your children about the plans so that conflict is less likely to erupt when your other children find out that one received a greater inheritance (because this will eventually come out).
The same is true for the following situations:
- You decide to leave a greater share of the assets to a child who has a smaller income or a larger family than the other children.
- You decide to compensate one child who has been very helpful with a family farm or business.
- You have a special needs child who will require additional financial resources after you are gone.