Equal is not always fair.
Most parents are used to their children complaining about fairness.
Siblings seem to be have a radar to detect even the smallest millimeter of difference on desserts or the tiniest fraction of a second for use of a shared toy.
The hope is for children to outgrow this obsession with fairness and competition.
Unfortunately, this does not always happen.
According to a recent Kiplinger article titled“How Should Your Children Inherit? 4 Scenarios Where ‘Equal’ Is Not Appropriate,” some parents are tempted to simply divide inheritances in equal shares to avoid sibling conflicts after the parents have died.
While this may seem to be a good solution, it is not always the most fair or beneficial solution.
Many instances exist where it is better to give one child more than another.
What are these circumstances?
The Caretaker Child Lives With the Parent.
Caretaking is not a simple job.
It takes extensive emotional energy and tons of time to coordinate and drive aging elders to health appointments, pay bills, and provide end-of-life care.
During this time, the caretaking child may sacrifice a career and time with other family members.
To account for the support provided by the caretaking child, parents may elect to grant a larger portion of the estate that child.
A Child with Special Needs.
Children with special needs often require greater financial assistance and personal involvement from the parents.
Consequently, in their estate planning such parents must address how the special needs child will receive care after the parents have died.
Oftentimes, the planning will likely not result in equal distributions to each child.
Rather, the child with special needs may lose eligibility for government benefits with a direct inheritance.
By using a Special Needs Trust or a Supplemental Needs Trust, the parents can provide for the child while also protecting essential eligibility.
Most siblings of children with special needs understand this.
If one of the siblings will be providing care for the child with special needs, this should be outlined and discussed with them before the estate plan is finalized.
An Adult Child with Problems.
As you have heard from me before: some children grow up and others just keep on having more birthdays.
The latter tend to grow up to make poor life choices.
Money from an inheritance can sometimes be used to fuel their destructive habits or decisions.
An equal inheritance may not be wise.
It could be better to give less money to children who have substance abuse disorders, mental illness, or a history of crime or divorce.
If you do choose to give an equal share, you may choose to place rules on distributions from a trust rather than an provide outright inheritance.
Wealth Disparities Among the Siblings.
Some children may be financially stable while others are not so much.
This does not mean your children have different work ethics.
Sometimes hard times hit.
Other times, one child simply makes less money than the another.
You may choose to give more to the struggling child.
Because income and wealth change over time, you may want to reevaluate this choice fairly regularly.
Although there are several reasons why parents choose not to give heirs equal shares in the estate, no family is the same.
You should work with an experienced estate planning attorney to decide the best option for you, your goals, and your family.
Reference: Kiplinger (Dec. 18, 2022) “How Should Your Children Inherit? 4 Scenarios Where ‘Equal’ Is Not Appropriate”