When it comes to distribution of assets to children, some parents may want each child to get an equal portion of the inheritance. But while this may sometimes be the best choice, one has to consider fairness, as a young independent child may need more supplies than a more independent adult child.
Sometimes, parents do lifetime gifting to the child who needs more financial assistance, and this may or may not need to be included in the estate plan. When this is done, then the remaining assets can be distributed equally among all the children.
Some parents may need to assist a child financially now by making loans to the child which he or she would be expected to pay back in the future. Parents who do this require additional planning to include this kind of situation. If they desire all the kids to get equal amount of the inheritance, then the parents would require the assisted child to make a promissory note, vowing to pay back the exact amount borrowed. By so doing, there is no need to make any changes to the estate plan anytime money is borrowed since the money will eventually be returned, and there would be a record for each amount giving to the child. If the money is not paid back before the death of both parents, then the owed amount will be subtracted from the child’s inheritance. If the parents do not want their estate plan to take this format, then they could as well state clearly what amount is expected to be passed on to each child, or better still, provide equal lifetime gifting for every child.
In a situation where a couple owns a business in which a particular child has given much involvement and impact without being compensated, the parents may desire to compensate that child by leaving the whole business to him or her, or giving that child a larger share of the inheritance. This is not equality but fairness. Not all children need the same amount of financial support from the parents. A child may already have a quick rising start-up to his or her name, while the younger sibling still schools. Of course, the younger sibling would need much more financial support from the parents than the other child who already has both feet rooted on the ground. However, there are still parents who prefer having each child getting an equal amount regardless of all these conditions, and sometimes it may be fair enough to do so depending on the nature of the family and parents’ intentions.
Parents having a child with special needs may need to create a Special Needs Trust (SNT) for that kid in order to maintain for him or her an adequate standard of living when the parents eventually die. The SNT would be needed by that child and not the other healthier ones. This is fairness and not equality. How about the child who deems it fit to care for an incapacitated parent out of love? Surely, such parent would want to leave more inheritance for that particular child. There may also be grandchild or other relative who comes to the house everyday after school to take care of the needs of the grandparent especially when the grandchildren have all grown up and are having excellent lives for themselves. Such a caring relative may be provided with a significant portion of the inheritance in contrast to the ideal heirs who are already well off with their lives. Mind you, this doesn’t always have to be the case.
As can be seen, there are indeed a plethora of conditions to consider in estate planning, and failure to be meticulous about it would inadvertently provide loopholes in the estate plan, with a lot of unforeseen but possible events not fully planned for. Each family has its own uniqueness and for this reason estate planning is completely individualized. Some couples having extended and complicated families may be at a loss how to be fair in distributing their assets but whatever the situation, it would serve your bests interests to hire an estate planning lawyer in your county to help you draft your will and trust, incorporating and addressing every situation surrounding your particular family.