Playing Fair In Estate Planning
When it comes to estate planning, many parents plan to distribute their assets equally among each of their children. However, if your goal is to be fair to each child, it doesn’t necessarily mean that you should distribute your assets equally. In most family situations, unique circumstances will need to be taken into consideration and it may become evident, as you plan for the future, that “fair” doesn’t always mean “equal”.
Consideration #1: Lifetime Gifting
If you have done lifetime gifting to one of your children but not others, you might not want to take that into consideration in your estate plan. You may prefer for the lifetime gift to be extra if that specific child needed additional help compared to your other children who are more financially independent. If that’s the case, your assets can be inherited equally by each of your children and the lifetime gifting doesn’t need to be reflected in your estate plan.
Consideration #2: Caregiving for an Aging Parent
Another circumstance in which parents may choose to distribute their assets unevenly is if one child becomes involved with or provides care for an aging parent. For example, if your daughter moved in with you or you moved in with her so that she could help take care of you, you may decide to compensate her by allocating a larger portion of the inheritance.
Consideration #3: Income Levels & Family Size
Some parents may prefer to provide a bigger percentage of their estate to the child who has a larger family to support or a lower income than the others. In this case, you can designate a bigger share of your estate to go this child, or, to their children, in your estate plan.
Consideration #4: The Family Business
If your child has been involved in your family business and you feel that he or she has not been properly compensated for the amount of work and time contributed, you may choose to leave him or her a larger inheritance. This can include leaving them part or all of the business. Or, even if your child has been properly compensated for their involvement in the family business, you might want the whole business to go to the child that has been involved all along, as opposed to dividing up the business equally between all of your children. You might then chose to equalize your asset distributions by giving other assets like investment accounts and life insurance to the other children.
Consideration #5: Special Needs
If you have a child with special needs and you feel that this child will need more support than the others, you might decide to leave a bigger portion of your estate to the child in a special needs trust. Alternatively, if you determine that your special needs child will not benefit from a larger inheritance you can decide to leave behind less for that child than the others.
As outlined above, there are many different kinds of circumstances to consider when distributing your assets to your children in your estate plan. Of course, every family has different dynamics and unique situations which makes it all the more important to be proactive with your estate planning. One of the best gifts you can leave your children is a complete estate plan that incorporates all of your wishes.
To discuss your specific needs and to find out how an estate planning lawyer in Pittsburgh can help you, please call us at Fingeret Law (412.281.8222) or contact us online.