Troubleshooting Legal Problems

The potential impact of unequal inheritances

Effective estate planning requires proactive steps to ensure that loved ones are provided for following a tragic loss. While no one plans for the devastating loss of a loved one, having a plan in place can make things easier during difficult times.

A common strategy for older parents with multiple children is to provide each adult child with the same inheritance. However, particular family dynamics could necessitate one child getting more or less. Some siblings with successful careers may be self-sufficient, while others have struggled with bad luck or poor decisions.

Reasons behind the perceived imbalance

A 2018 study by Merrill Lynch Wealth Management and Age Wave revealed that two-thirds of parents 55 and older cited a child providing them care should receive a more significant portion of an inheritance. Additionally, adult children with children should be gifted more of the estate than childless offspring. Loss of a job can also motivate a monetary increase.

What is fair for some is not fair for others. Fairness is a vague term, as is equity, mainly when it involves assets from an estate plan. Some children who take an irresponsible approach to money have to send a message to parents that the behavior will only continue, if not grow worse, with a sudden monetary influx.

Following the loss of a parent or parents, unequal inheritance could create a negative “legacy” that sees brothers and sisters fighting over money and property. While many find resolution to disputes, other disagreements can be the first step to courtroom battles.

While parents are still healthy and alive, a candid conversation about what each child will receive is of paramount importance. While it cannot guarantee acceptance following the loss of parents, it can provide a clearer picture necessary when a life-changing event occurs.