When it comes to estate plans, there are no laws requiring parents to evenly divide assets among children. Equality often makes the most sense, both practically and emotionally. However, life circumstances may prompt questions about what constitutes equal. Experts offer opinions—and stress the importance of communicating intentions.
What Does Equal Mean?
If one child helps aging parents more than others, does that child deserve to inherit more? Is money an appropriate expression of gratitude? What if some children and grandchildren are on more solid financial ground then others—or even wealthy? Does “need” play a role in determining how to carve up assets? Of course the “right” answers to questions like these all depend on the particular circumstances of each family—and the ability to have clear, open conversation. How, for example, would you respond to this question recently posed to experts at The New York Times: “My brother and I are both around 50 years old. I’m single, and he’s married with three kids approaching college age. Our parents are in their 70s. Over dinner, they announced their estate plan:…they are dividing their estate into fifths: one-fifth for me, one-fifth for my brother and one-fifth for each of his kids. I didn’t say anything, but this seems really unfair…Now, add the fact that I’m the only one who lives near my parents, and when they need help, they call me. Should I say something?”
Hmmm, though provoking, right? What we don’t know about in this case is the financial security of the siblings and grandchildren involved. We also don’t know the reasoning and intentions behind the decisions reflected in this estate plan. As experts point out, the best thing to do in such family circumstances is try to open up courageous conversation:
When parents treat siblings differently — whether the kids are 5 or 50 — it can trigger rivalries and make anyone feel less loved. (Here, your brother and his children will take 80 percent of your parents’ estate.)…There is a silver lining, though: Your parents are still alive, which means you can talk to them about their plan and the reasoning behind it. Now, this conversation will probably be awkward. (Talking about other people’s deaths and money usually is.)…A couple of thoughts to help make your talk more productive: Remember that it’s their money to give away. And sometimes, fairness means treating people — even siblings — differently, in proportion to their needs…There’s nothing wrong with asking, “Can we talk about your will? I want to understand your thinking.”…Drawing them out may ease your mind and head off resentment about helping them as they age.
Think Ahead and Share Intentions
Obviously, unresolved conflicts damage family relations. Even if we disagree with estate planning decisions, understanding intentions helps everyone in the long run. Another important aspect of estate planning is appointing a loved one, friend or professional to serve as the fiduciary who will steward the estate plan in accordance with the intentions set forth in, estate planning documents, like a will or trust agreement. This person is generally referred to as an executor, trustee, or personal representative, depending on the circumstances and location. Though sometimes waived, an estate bond can play an important role in reinforcing the intentions set forth in an estate plan. Long a tradition in wealth transfer, an estate bond protects the interests of the estate and its beneficiaries in accordance with state law. Sometimes these bonds are referred to as fiduciary, executor or trustee bonds. At Colonial, estate and other bonds are available directly and digitally. The steps to obtaining an estate bond are easy: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond right from anywhere—even the law office.
Helpful Considerations
When it comes to estate planning, equal tends to be interpreted narrowly as “exactly the same.” As ethicists point out, however, that’s not quite the way equal is interpreted when it comes to actively loving each child as a parent. In other words, though “equal shares” is often convenient in estate planning, it’s not the only option:
The major considerations that move people to favor equal shares…is, first, that equal shares can express the idea that parents have equal care and concern for each of their children; and second, that the practice requires no comparative assessment of their children’s lives, virtues or needs. Notice, though, that this posthumous approach doesn’t match what we think is appropriate in parenting. When we’re parents, loving each child equally entails paying attention to each of them, taking note of their different appetites and aptitudes and responding specifically to them. Our equal love would be evidenced by our giving our tennis-playing son a new racket and our golf-playing daughter a new golf club — not by giving them each a tennis racket.
When life circumstances lead to an estate plan that could be surprising to beneficiaries, it is extra important to make the intentions clear—ensuring that money is not equated with love: “If the estate were to be divided in a way that favored one child over the other, the parent should make it clear why doing so was consistent with each having an equal claim to the parent’s love…As Aristotle points out in the “Nicomachean Ethics,” when people who are equal are granted unequal shares — or people who aren’t equal are granted equal shares — “quarrels and complaints arise.”
Indeed, legal experts caution that lingering, unresolved family conflicts are frequently at the roots of messy and painful probate litigation. As Justia notes: “High-risk factors for probate litigation include sibling rivalry, second marriages, and dysfunctional families.” Even when done with the best of intentions and reasons, surprising decisions made in estate plans can trigger contests to the estate plan. Challenges to validity of legal documents involved with wills and trusts, and lack of faith in the appointed fiduciary, such as the executor or trustee, can also pave the path to litigation.
Estate Bonds—and More?
Colonial Surety helps busy lawyers and their clients navigate estate planning and probate with a fully digital, user-friendly fiduciary bond portfolio. Available bonds include: administrator, estate, executor, guardian, personal representative, probate, surrogate, trustee, conservator and more. We have a full array of court bonds too. In addition to providing estate and other fiduciary bonds directly to the general public, Colonial offers The Partnership Account® for Attorneys . This free business service provides efficient client management dashboards, enabling attorneys to easily coordinate, view, complete and e-file the court and fiduciary bonds clients need. See for yourself today: The Partnership Account® for Attorneys.
Founded in 1930, Colonial Surety Company is a direct writer of surety bonds and insurance products. Colonial is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed, and licensed for business everywhere in the USA.