It’s said that there are two things that are certain: death and taxes. With respect to the former, it’s important to plan for what will happen to your money when you pass on. That day might be a long time from now, and you might not have any kids at this time. Regardless, it’s a topic that at some time or another will find its way on the minds of many people. With kids later in life, it might even generate conflicting emotions for people in terms of how to divide up assets.
OK, it may seem cold and unemotional to think of ourselves as economic assets that will eventually be cashed in and allocated to different people. However, the reality is that we won’t live forever. And when we do leave, and emotions are running high with family, it’s possible that amidst the sadness there could be worries over who gets what. I certainly think that’s unfortunate, but it happens.
My question is this: from the perspective of someone drawing up a will, would you ever leave more for one kid versus another?
I know people who have had these issues, as I discussed in a prior post on siblings dividing an inheritance. They were very civilized, and looking back, I’m impressed at how my friend in particular (the one I keep in touch with) ultimately moved on from the whole ordeal. Now, with question I’m asking here, I’m looking at dividing assets for children from the perspective of a parent.
What got me thinking about this from this different vantage point was an article in the WSJ on how to give less to one kid in a will. Admittedly, it’s a concept that in principle went against the grain for me at first. I believe in fairness between kids, and looking out for their best interests equally. After all, each child is important and should be treasured. Kids that feel less loved than a sibling- even if adult kids – can be hurt deeply, whether or not they admit it. Clearly, it can be a hot button issue.
So, my original thought was that things should be divided equally. Simple as that, right? No need to complicate things or be subjective about it. Fairness is in equality.
Well, thinking about it some more, I think it’s not really that simple. Kids can grow up and end up having very different situations on a variety of dimensions. Examples include:
- Profession – one could be in a lucrative field, another in a modest-paying one, despite both working hard
- Spouse – one could be married to a high earner, another to a low earner
- Marriage – one could be happily married, and the other could be perpetually single or have been through a tough divorce
- Ability – one could simply be more talented than another
- Health – one could be in much better health than another
- Kids – one of your own kids could have 3 kids of his/her own and the other just 1 kid, for example
- Luck – one could have been lucky in life, while the other has simply has some unlucky situation happen
These are all examples of how kids, as they grow up into adult kids, can take divergent paths from their siblings. Note that I’m not talking about differences in basic work ethic, financial responsibility, or integrity.
It’s clear that among siblings, some can end up with much better financial lives than others. Think about your own situation compared to any siblings you might have, or what you see in other families.
Considering all these factors, I now think of equality in a more holistic way.
Meaning, I would consider leaving assets for kids in a way that’s not an exactly equal distribution of what I’d ultimately have. It would be influenced to some degree by true need. Again, hopefully this won’t come into play for a long, long time. When it does, I’d try to pay close attention to the kids’ individual situations and plan accordingly.
The key thing is to be honest, and to make sure that kids don’t get lazy in any way and fall back on any potential for an inheritance. Easier said than done, perhaps. We’ll see, many years from now:)
Not everyone would agree with my philosophy. Many would advocate exactly equal division regardless of need, or some other philosophy. You can always check out estate planning items for further information on how to do things exactly the way you want to.
My Questions for You:
What do you think of the idea of dividing up assets based on a holistic view of equality, rather than based on a clear division?
Or, do you simply not care about equality and feel that money would be left based on some other decision process?
Or, do you feel very differently than I do, and you don’t believe in leaving money for anybody?
My son lost his father in the car accident last year November,his dad had another child from another woman,he never had any will so now I’m having a huge problem with the other mother,she is claiming everything,the money from the bank and others,mind you he was never married,so I’m wondering how do I deal with such a situation?
If your son’s father had any joint accounts with this woman, then she is entitled to that money. She can withdraw it all. If he had any accounts or assets in his name only then the assets go first to a spouse…..if no spouse, then assets go to the surviving children providing you have proof he is the father. If your son’s father had a job (if you have proof he is the father) then the children may be entitled to some kind of social security benefits. Hope this helps….
I took care of my dear mother at home so she passed away at home. Now i am taking care of myvdear old dad 24/7. i have 4 brothers and sisters. as soon as mum died my brothers and sisters became abussive over dad there was alot of name calling. to make things worse they havent helped out or even seen dad since mum passed away except for one who comes around every two months or 3. they have also caused me great problems and lies and abuse all they are worried about is the will. i have been told i am brain washing my dad. i have even been told if i get everything they are going to kill me. so i have lost all my family. My dear old dad has made a will and has left everything to as dad says i am the only one he seing and helping him and has lived in his house for 4 years. I am worried of what will happend. dad has told the solicotors that he doesnt want his will to be contested and that he didnt want his other children to have nothing. Now my question is can the will be contested? which will go against my fathers wishes. please help
My grandmother had 4 kids. She had a very specific will on who was to get what property and what sums of money etc. She also included a detailed clause that if any of the 4 kids were to contest the will they would relinquish their right to inherit their original portion and would instead only inherit $1.00. It is legal to add punishment clauses for contesting the will, if your dad wants to do this, call your attorney and have them add the amendment to his current will. If they’re smart, that’ll teach them not to make threats they can’t back up. Two of the grandkids were being abusive to their father and making it clear they intended to try to take as much money he was set to inherit as soon as he inherited it and my grandmother added an additional amendment that put his share in a trust. If he passes away, the remaining funds in his portion of the inheritance, held in the trust separate from his own income and money, revert back to the estates trust and are to be split among the surviving three siblings, i.e. She made it impossible for those grandchildren to inherit a penny of her money even after their father passed away.
Im one of three children that out of the 3 have never borrowed money from parents but one of the 3 has had a $20000 deposit for house given to them previously. How come his will has shared residue evenly surely he would give them less??
I am 5 grandchildren that I want to inherit our money when we are gone. However, I am in a second marriage and my current husband has 1 daughter. I feel his daughter should receive more than my side as he has been the breadwinner most of our married life. We live in his modest home and when we got married we put on an addition that I contributed to from my working and alimony. We have been married 26 years.
My husband says my grandkids split 1/3 and his daughter gets the other 1/3. How does this actually end up being and is it fair? We have a modest life style and for the sake of figuring this out lets say we have $ 200,000 to split. What would 1/3 divided among 5 kids be and how much would the other 1/3 be?
Kids should always be treated equally in your life and in your death… if you give to one , then you should equitably give to the other. Period. Each child has made choices that affect their futures; they may benefit more in life if they did a good job making choices and shouldn’t be penalized fo it. As a parent part of your job is shaping their future through your expectations, preparation, and a good dose of reality.