Estate Planning for Unequal Inheritances

While most parents want to leave equal inheritances for their children, some major factors can change circumstances.  Experts say drug addiction and special needs is a common reason for unequal bequests.

If handed poorly, uneven bequests can poison the relationship between parents and children while all are still living and can wreck sibling relationships after the parents are gone.  The challenge for planners is to help families create estate plans that echo the parents’ wishes and handle those plans in ways that do not splinter relationships.  Even when a child has special needs that are widely acknowledged, planners must craft solutions to effectively protect the inherited assets. 

Parents who plan to leave unequal inheritances must decide what instrument they want to use.  Not everyone is willing to create a trust; “You might not want a trust because it’s more complicated during your lifetime.  You have to transfer your assets into that trust.”  Despite the hassle and expenses, a trust may make more sense than a will, particularly when a family plans to leave assets unequally.  Trusts sidestep probate and are unavailable for public inspection, making them more difficult to challenge.  An estate plan that creates separate trusts to separate children’s inherited assets at the parent’s death can help instill family harmony. 

See Ingrid Case, Family Drama: ‘But She Got More!’, Financial Planning, Oct. 27, 2014.