Should you treat your children equally in your will or trust?
Many people want to divide everything equally between their children in their estate planning documents because they want to be "fair." Almost everyone comes into my office initially saying this is what they want to do.
However, sometimes during the consultation, a different picture emerges. For example, parents may tell me about an adult child who can't manage money, a child who received a loan from them and has not repaid it, or a child who is divorcing. Other concerns are: a child who is doing fine now but has a disability that requires ongoing health expenses; and unequal financial or job situations between their adult children.
One of the most serious concerns clients have is when one child has an addiction issue. (I always admire parents who tell me upfront about these issues so we can address them in their estate plan.) If you have a child with an addiction issue, leaving a large sum of cash from an inheritance could literally kill the child! That doesn't mean you have to disinherit a child with problems; you don't. You can still be fair without leaving an equal lump sum outright to each child.
Estate planning when your family isn't perfect.
First of all, don't worry about trying to be perfect. Most families aren't. One way to address family dynamics and differences between your children is to use a trust. Trusts can spread out payments based on need and allow you to choose a trustee who knows your child and will balance your child's needs with distributions from the trust over time. When designing your trust, you can determine in advance whether you want the trustee to be liberal or conservative in making distributions to your children. You can specify that the trustee has the flexibility to make distributions for emergency situations that may come up after you're gone.
Trusts can be a great way to be "fair" and still accommodate your family's unique needs. We're here to help. Call us at 704.887.5242 to schedule a consultation.