Fair Does Not Always Mean Equal:
Avoiding Conflict in Inheritances
Compliments of Our Law Firm, Sexton, Bailey Attorneys, PA Law Firm
Written By: The American Academy of Estate Planning Attorneys
Let’s face it, even in the closest-knit families, money and assets can still create problems. For example, resentment can show up when one sibling has seen greater financial and career success than his siblings and trying to “balance” that in your estate plan can cause further friction in the future. So what do you do when you’re estranged from one of your children, or how do you balance your distributions when one of your children has five children of his own and another has chosen to put off creating his own family until he’s established in his career? Are you obligated to leave at least the same amount of cash to your son that you gave your daughter as part of her downpayment for her home?
Clearly, “fair” does not always mean “equal.”
If you have decided to leave unequal inheritances, there are things you can do to offset or prevent hurt feelings or anger after you’ve passed and also, to prevent any legal challenges. The best way to avoid future problems is to discuss your plan and your reasons while you’re alive.
If you do choose to memorialize your reasons, it’s important to be honest, but also recognizing that your letter may be shared during a time that your loved ones are still grieving. While it sounds simple, many of the more successful efforts include more than a simple explanation; instead, they include a more heartfelt justification.
For instance, instead of saying, “Your father and I paid for your college education, so we wanted to put into place enough cash for your brother when he decides to buy a home…” a mother instead chose to say, “Your father and I were so proud of you as we watched you receive your college degree. It was one of our proudest moments and we knew it was one of your proudest accomplishments. Because of that, we wanted to be sure your younger brother would have the opportunity to experience that as well. While he opted not to attend college, we knew that he would soon want to start his family. That begins with buying his first home. We know you will understand that immense pride that comes with being a homeowner and because of that, we know you will also understand why we wanted to play a role in that by making sure he has the funds for a downpayment.”
Often, these heartfelt explanations can remind adult children of what really matters in life.
If, however, you do want to provide a more balanced inheritance, you may wish to consider a life insurance policy to provide balance for the child who receives less than a sibling. These are affordable options for most families and can prevent hurt feelings.
Ultimately, the decisions are yours. Because each family is different, only you can make the call on what works best. Either way, your estate planning attorney can provide guidance to meet your goals and wishes for your children after you are gone. Finally, your estate planning attorney can discuss including a “no contest” clause as a way of decreasing challenges to your plan!