You have a sizable estate, and you have children who will someday inherit the assets of your estate. You are preparing the necessary documents to state your wishes for how your estate is divided. But what exactly do you want to happen with it? In the book â€œThe Charles Schwab Guide to Finances After 50,â€ author Carrie Schwab-Pomerantz poses the following scenario: â€œIâ€™m confused about how to divide my estate between my children, who have different needs and financial resources. Is it best to divide it into equal parts?â€
A recent Millionaire Cornerâ€™s article, titled â€œDividing the Estate: Treat Your Children Well,â€says this question is directed at people who have children at different levels of personal and financial success. It suggests that the parent in this scenario may want to do more for the struggling child than for the successful one as far as designating heirs for their estate assets.
The original explains that it makes sense for parents to treat their children equally. While one may think about providing extra assistance to a child with fewer resources, or for a child with special needs, you need to do so cautiously. The article also reminds us that the status of the children can change over time, making a strong argument for equal distribution.
However, if you do decide to divide your estate unequally, itâ€™s a good idea to explain your plan to all of your children right awayâ€”be honest about any of your concerns for each of them.
If you choose an unequal distribution, you might consider giving more money to the children who need it the most, and the more successful children could have some of the family heirlooms with emotional value and maybe a high resale value. To make sure your estate wishes are executed as you want, only an estate planning attorney can make certain everything is legally binding and proper.
Some people choose adult children to serve as executor or trustee for the estate, and the article warns against this. The size of the estate and the complexity of assets are two things to consider, along with the emotional stability of the family members who will be benefitting from the estate.
When one person in a family is given authority or power over others, thereâ€™s always a chance problems could arise. Children may all get along nowâ€”but could that change when money is involved or issues of control arise? It might.
When choosing an heir to execute the estate, you should think about whether that person is going to be paid from the estate for the services he or she provides. Once you make a decision, you should talk to your children and be open about your estate plan. This includes whatâ€™s in it for each of them and why youâ€™ve chosen a specific person. Theyâ€™ll be happy to know that you trust all of them with this and that theyâ€™ll honor your wishes without discord.
For more information on this and other elder law and estate planning subjects, contact Idaho Estate Planning and schedule a consultation. Remember, good planning is no accident.