In Estate Planning, When Does "Equal" Mean "Unequal"?

Figuring out how to divide your estate can involve making tough choices.  This is particularly the case when there are multiple potential beneficiaries who have differing (and sometimes conflicting) expectations about what they’re going to inherit from a loved one’s estate. 

In situations where the beneficiaries of the estate will be an individual’s children, a difficult decision can involve whether the estate is divided equally between them or whether different kids receive different shares.  A recent article from the Wall Street Journal considers some of the complications that can arise in both scenarios.

Sometimes, a decision about how to divide an estate can be driven by spite – a parent, angry that a child didn’t live up to expectations simply disinherits him.  However, frequently, the individual making the will has sound reasons for distributing his estate in a specific way. 

For example, it might have been that one child received considerable financial assistance when the parent was still alive, so the parent decides to use her will to “equalize” the situation between the children.  Or, one child might have considerably more financial resources than another and the parent decides to “help out” the poorer child. 

Whatever the rationale behind the way you divide your estate, there are a couple of things to keep in mind.  First, consider the legacy you want to leave behind.  Just because you had very good reasons for the way you decided to divide your estate does not mean that the beneficiaries will figure them out; instead, they may end up angry and bitter. Second, consider the way the distribution of an estate will affect the relationship between surviving family members – good intentions behind an estate plan might be rendered meaningless if the result is family infighting and broken relationships. 

It is a good idea to discuss the contents of your will with those who will be affected by it.  Although the idea of children expecting an inheritance may seem distasteful to some parents, a very common impetus for estate litigation is a child being unpleasantly surprised by the terms of a parent’s will – having a discussion while you’re alive can help stave off bitterness (and litigation!) when you’re dead.