Is it ever advisable to arrange estate planning so that more of the funds go to the neediest children in the family?
mary elizabeth coleman, ceo, tuckerallen
Absolutely. There are a number of reasons why a parent may choose to leave assets unequally to their children, but let’s use a common example to demonstrate why ‘fair isn’t always equal.’ Take the typical middle-class family. Probably the largest asset they will bestow on their children is college tuition. In this example, there are two children with a wide gap between their ages. The parents have paid the tuition for child No. 1, who has recently graduated college. But child No. 2 has not yet started college when both parents die unexpectedly. In this event, splitting the inheritance 50/50 would not be equitable at all.
To mitigate this risk, we suggest that these parents consider leaving their assets to their children in what is called a sprinkling trust. This holds assets in a single pool to be used based on the individual needs of each child. Funds are distributed at the discretion of the trust’s trustee until the youngest child reaches an age predetermined by the parents—typically around age 25.
In this case, a sprinkling trust would make funds available for both children’s health, education, maintenance and support until the youngest child reached the predetermined age. At that point, any remaining inheritance would be divided equally. Ultimately, both children would be treated fairly, based on the individual needs of each child.
brian quinn, attorney at law, quinn estate & elder law
Yes, there are reasons to favor a needy child. Maybe they have an illness or a disability. Maybe some of your children are financially better off than others. Ask yourself, “Does this accomplish what I want to do with my estate, and is this the best choice for my family?”
Whether this meets your goals depends on why you want to leave more to one child than another. Do you want to make sure your disabled daughter can meet her costly special needs after you are gone? Do you want to make sure that your son with cancer has the funds to take that trip of a lifetime? Do you want your child in the small apartment to finally be able to afford a house like his siblings?
Whether this is the best choice for your family is about family harmony. If you leave more to one child, even with good reason, does that hurt your relationship with your other children? Do you get the cold shoulder from your children during your lifetime? Do they take out their anger with you on their sibling after you’re gone? Is there a court battle?
Your estate plan is confidential, but if you want to treat your children differently, it may be a good idea to let everyone know that early in the process. That leaves more time to discuss why you are making this decision and to set expectations well in advance. This leads to more family harmony in the end.
