Some parents in Tennessee who are creating estate plans may wonder whether they should divide their assets equally among their adult children. When making this important decision, there are several factors they should consider.
Equal or equitable?
First, parents should keep in mind that “equal” and “equitable” are not necessarily the same thing. An equal division might seem better for sibling relations, but people may want to consider whether their children have had the same financial advantages.
For example, a parent may have helped one child more during the parent’s life. In a case like this, a parent may want to leave less money to that child and consider what they have already given as an advance of the inheritance. Parents may also want to consider whether to divide their estates based on the financial needs of their children. A more responsible child may get more money than one who is struggling.
On the other hand, perhaps one child needs more financial help than a child that has his or her own financial assets. Additionally, even if parents want to divide assets equally, sentimental factors may play a role in the decision-making. Perhaps one asset with less monetary value has more meaning, hence “value” to one child than it does another.
These are all factors that can weigh into the final disposition of property.
Another factor parents may want to consider is whether one child has acted as their primary caregiver. In this instance, the child that has been more supportive of the parents while living may be entitled to a greater share of the inheritance. Sometimes the parent has been the caregiver for an adult child and may decide that the child needs continued care after the parent’s death. Siblings are likely to be understanding if one of them has a medical condition that requires lifelong care that would require a parent to leave substantial assets, in trust, for that child with special needs.
Despite the best planning, resentment among siblings and other beneficiaries can arise. In order to avoid such issues, it may be prudent to explain your reasoning to the children prior to your death or leave a letter for the children to read so they are educated on why the assets were not divided equally.
For more contentious situations, there are safeguards parents can build into their estate plans to reduce the likelihood of any challenges that might arise, whatever the nature. For example, a “no-contest” clause could specify that a person who contests the Will loses his or her inheritance.
Another great alternative for placing conditions on children who might raise questions about your decisions is to use trust provisions that indicate when and under what conditions children may receive their inheritance. Having close family members or the family physician involved in the Will execution could also prevent suspicions about whether one child has unduly influenced the parents’ decisions, which is one of the main concerns that arise in Will contests.
Lastly, solid planning during a period of time when parents are unquestionably competent and in control of their assets is the best time to execute estate documents. Often last minute Wills where only one family member is involved casts doubt about the process.
In the end, parents may decide that preserving family harmony is more important than dividing assets exactly the way they would really have preferred. Having a lawyer and financial adviser involved in the planning and execution of all of the documents is well advised for all parents so that an objective professional can talk through the issues and educate on how best to resolve any concerns.
Many times, people attempt to draft their own documents, but aren’t familiar with the laws. This can lead to their intentions being thwarted no matter what decisions they have made about dividing their assets among the children. Parents should view estate planning as their final gift to their family.