Though the desire to “divide everything equally” among adult children is an understandable and common approach to estate planning, it may not always be the best. Differing life circumstances may point to different solutions, and with effective planning and communication, resentment and conflict can be avoided.
Evolving Lifes
Carefully arranging to pass assets on to the next generation can have a life-changing impact, making it worthwhile to be proactive and thoughtful about estate planning decisions. Even modest gifts can put a dent in serious economic challenges like medical or student debt, or the purchase of a first home. Because the needs of adult children and grandchildren likely differ, it’s OK, and often even best, to deviate from the “divide everything equally” approach to estate planning. There is absolutely no law that says parents must leave anything at all to their children, and certainly no rule that says inheritances must be equal. Keep in mind that what is critical in estate planning is being clear about intentions, and not leaving secretive or misunderstood decisions to surprise. Estate planning experts caution, “Without previously experiencing any significant conflicts, even close siblings can struggle to maintain happy family relationships when settling your estate,” and advise proactive communication:
Speaking to your children directly is the easiest way to avoid a fight. Manage their expectations about your estate plan and listen to their input. Unless you ask, you cannot know for sure what they might want to hold onto once you’re gone. These family discussions need to include all heirs because if one heir gets a say about what they inherit, so should all. In the end, you may be planning for unequal distributions of your estate and don’t wish to discuss this with your heirs. If this is the case, consider including detailed language in your estate plan regarding how you came to your decisions. This can help your heirs better understand your goals and minimize potential conflict among them. Your estate planner can also communicate with your family about why being fair is not always the same as being equal.
Clarifying Plans and Intentions
Life takes twists and turns. Maybe one adult child has fallen in love with the pursuit of a Ph.D. while another has been bringing in big bucks for years. Perhaps health problems or special needs have set one grandchild’s family back? Do two of three children own homes while the third is just shy of the down payment? These are just a few of the reasons why equal distribution of assets in an estate plan is not always the most realistic approach; experienced attorneys can suggest viable alternatives:
When you begin shaping your estate plan, you may consider a strategy that focuses on splitting up your assets equally. Then, as time passes and your children’s lives evolve, you can revisit your will or trust to make adjustments as often as you like. There may even be a way to address specific financial scenarios and concerns in your estate planning documents that would trigger leaving more to one child than another, but only should something particular or unexpected happen.
It’s also important–and not at all selfish–for aging adults to consider their own financial and care needs when creating an estate plan. Indeed, longer lives and rising costs mean that possibly the best gift we can ultimately give to the upcoming generations of our families is planning for our own needs, which includes designating fiduciaries to make financial and healthcare decisions as necessary.
Fiduciaries and Estate Bonds?
The designation and preparation of a loved one, friend or professional to serve in a fiduciary capacity, and carry out our goals, is a critical aspect of estate planning. Depending on circumstances and region, a fiduciary may be specifically referred to as an executor, personal representative or trustee. Regardless of the details of an estate plan, the fiduciaries appointed have a legal responsibility to carry out our affairs, in accordance with our intentions and the law. When representatives are designated, fiduciary bonds, alternatively referred to as estate bonds, may be required.
This information on estate bonds will come in handy for fiduciaries. At Colonial Surety Company, a leading national provider of all types of fiduciary bonds, the steps to obtaining estate bonds are easy: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere—even the law office.
Estate Law Practice?
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