What to Do If You Want to Leave Your Children Unequal Inheritances
Parents usually want to leave their children equal shares of their estate, but equal isn’t always fair. If you plan to provide more (or less) for one child in your estate plan, preparation is important.
This was the subject of a recent New York Time article, “The Unequal Inhertiance: It Can Work, or It Can Destroy Relationships“.
It is natural for parents to want to treat their children equally in their estate plan, but there are some circumstances in which a parent might want to leave children unequal shares. If one child is providing all the caregiving, the parent might want to reward that child. If one child is substantially better off than another child, then the parent might want to provide more for the child who has a greater need for the funds.
Other factors that can influence how much to give each child is if one child has special needs or if there is a family business that only one child wants to run. It’s also possible that the parents have already provided more for one child during their lifetime, maybe by paying for graduate school or helping them buy a house.
Whatever the reason for leaving your children unequal shares, the important thing is to discuss your reasoning with the children. Sit down with them and explain your decision-making process. If you feel like the conversation could be difficult and contentious, you could hire a mediator to help facilitate the discussion.
Your children may be understanding of your decision, but if you are worried about one child challenging your will after you die, you may want to take additional steps:
- Draft your will and estate plan with the assistance of an attorney and make sure it is properly executed. To avoid accusations of undue influence, do not involve any of your children in the process.
- Explain in detail your reasoning in your estate planning document and make it clear that it is your decision and not the influence of the child who is receiving more.
- Include a no-contest clause (also called an “in terrorem clause”) in your will. A no-contest clause provides that if an heir challenges the will and loses, then he or she will get nothing. You must leave the heir enough so that a challenge is not worth the risk of losing the inheritance.
- In Louisiana, you may want to include specific provisions to counter a forced heirship claim. Yes, forced heirship is still Louisiana law, although it was narrowed significantly in the 1990s. It still may apply to you and your children.
BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.
If you liked this article, “What to Do If You Want to Leave Your Children Unequal Inheritances” read also these additional articles: What are Your Early Signs of Dementia? and What Happens if I Take a Bigger RMD? and What are Benefits of Pre-Planning My Funeral? and How Does My Inherited IRA Fit into Estate Planning?