All parents understand the importance of a comprehensive estate plan that considers the needs of surviving family members. For parents with multiple children, drafting a balanced plan is easier said than done. How does one decide what is “fair” when each of their children has different needs?
Though they may be gone, however parents split their inheritance is likely to result in conflict among siblings. Surviving children may find that grieving for a parent is challenging, especially when coupled with an “unfair” inheritance.
Tactics for dividing an inheritance
Colleen Carcone, director of wealth planning strategies at the Teacher’s Insurance and Annuity Association (TIAA), recommends a few ways parents can build “fair” estate plans — beginning with the parents’ definition of fair:
- Equal-dollar distribution: Many people expecting a “fair” inheritance will balk when they see their parents left an equal-dollar distribution plan. Children who helped their parents through illness may feel they deserve more, or heirs may resent their already wealthy siblings.
- By need: Some siblings may need the money left by their parents, especially when compared to more financially solvent siblings. Singling out inheritors for receiving more is likely to create conflict, as some heirs may see this as punishment.
- Deduction of money gifted: Some estate plans deduct money already gifted to siblings previously. This inheritor will likely feel slighted.
- For the family business: If parents owned a family business, their children might now run it. When drafting their will, parents may consider bequeathing an increased dollar amount to the children in charge.
Carcone suggests that parents should speak to their children about their end-of-life plans. Open discussion rooted in respect and a desire to do what’s best can help provide heirs a needed perspective. Making these decisions family decisions can also help repair family dynamics after the parent passes.
Draft a comprehensive will with legal help
Many families have found success in drafting comprehensive estate plans with help from a local attorney familiar with will and probate disputes. A lawyer can focus on the dense legal paperwork while the family can work together to divide the estate fairly.