Most parents want to treat their children fairly. Many believe that this means that their children should inherit equally. But fair does not necessarily mean equal.
I often represent clients with one child who struggles to support his family and another who is financially successful and has no children. I also see cases in which one child devotes a significant part or his or her time to care for aging parents while other children have moved away. Often, one child joins the family business and others do not. In these situations, providing for children equally is not necessarily fair.
When establishing your estate plan, you must decide both how much a child should receive and how a child should receive his or her inheritance. This may be different for different children. Outright distributions may be appropriate in some instances while establishing a continuing trust may be better in others. You should consider factors such as your child's ability to handle money, marital situation, current needs, and likelihood of future lawsuits or financial problems. Assets that stay in a trust can be protected from irresponsible spending, lawsuits, creditors and bad decisions. If one daughter is a neurosurgeon with a rocky
marriage and tendency to waste money, you may wish to provide her with more protection than another daughter who is a teacher and who has been happily married for 25 years. The teacher may also need more access to funds than the surgeon. Your estate plan can be tailored to fit the needs of each child.
There are also times when both parents and children would benefit more from lifetime gifts than an inheritance. Helping a child buy a home, start a business, or send his or her children to college may be more helpful than receiving a larger inheritance later. In some cases, a gifting plan can also reduce estate taxes. Gifts to one child can also be taken into consideration when planning for different children. Estate plans should involve more than changing the name on a form. Your estate plan should be based on your desires and the specific needs of each of your beneficiaries. You don't have to equalize gifts to your children. Instead, you think through what it means to treat them fairly