5 Reasons You May Have to Split Your Assets Unequally for Your Children
Most parents want to treat all of their children equally. But sometimes in estate planning, it’s just not that cut and dried. Because not all is fair in love and estate planning, here are five scenarios where you may have to divide your assets unevenly.
- Earning Differences. Families with children who are super successful may be inclined to leave more to those who are less financially stable. This could cause conflict, since the script could be flipped in an instant if the higher earning child loses their job or the lower earning child hits it big. Mapping out a game plan to make all children happy is a step in the right direction.
- Family Business. Perhaps one of your children plans to take over the family business while others are pursuing other professions. Passing on a family business can add another level of complication to the estate planning process. If equal asset distribution is important to you, consider gifting shares of the business to the other children or compensating for the difference through other means, such as life insurance.
- Real Estate. Unfortunately, cutting a house in two is not the most practical way to distribute assets. While property is challenging to divide equally, there are ways to share title between more than one party. Consider the home value before determining fair market share.
- One Child is a Primary Caregiver. It might feel natural to leave more of an inheritance to the child who took care of you and your spouse before your death. After you are gone, this could present problems for any surviving children. To avoid conflict, consider paying your child for their care or gifting them while you are living.
- A Child with Special Needs. Children who are self-supporting often understand the need for more advanced estate planning. Whether you are leaving more money to other siblings assuming they will take on the role of primary caregiver, or creating a trust for the child with special needs, communication is key. One thing to remember is that disabled individuals do receive government benefits, however there are designated trusts for children with disabilities that won’t impact their government assistance.
Estate planning is a complex element of family dynamics. The key to being successful is clear and transparent communication, and meeting with a professional who can help you navigate the best solution for your family. The team at Anselmo Lindberg & Associates is prepared to identify areas of potential conflict, present solutions to otherwise complex problems, and help give you the peace of mind you need. Contact Anselmo Lindberg & Associates to get started today.