How Should Your Children Inherit? 4 Scenarios Where ‘Equal’ Is Not Appropriate

Equally sharing the wealth among the kids isn’t always fair, such as when one sibling is the primary caretaker, or another is already wealthy.

A couple sits outside at a table with a laptop in front of them as they discuss how their children should inherit.
(Image credit: Getty Images)

Every estate planner has conversations with their clients about how children should inherit. While most people assume that children should inherit equally, many clients contemplate treating children differently for various reasons.

Here are some situations where an equal inheritance might not be appropriate, and the pros and cons of treating children differently.

Scenario #1: A Caretaker Child/Child Lives With the Parent

Many times, one child primarily helps an elderly parent. This could include helping with medical appointments, coordinating care with various health care providers, being heavily involved in end-of-life care, paying bills and companion care. Oftentimes, this care is provided by a child who lives with or is close to the parent.

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If a child lives with the parent, it may be appropriate to leave the home to that child to the exclusion of the others. This could either be done by simply giving the home to the child or leaving the home to a trust for the child for their lifetime.

Similarly, a parent may wish to give the caregiver child a larger percentage of the inheritance in recognition of the additional help provided.

Scenario #2: A Special Needs Child

If a parent has been the primary caregiver for a special needs child, then the estate plan should take this into account to ensure that the child will be properly taken care of after the parent’s death. Depending upon available government aid, this can often mean a special needs trust or supplemental needs trust for the child, with more or less than an equal share of the estate being held by the trust.

In this scenario, the other children can often be more understanding. In practice, many times the siblings are involved in the plan for caring for their grown sibling when the parents are no longer able.

Scenario #3: A Child With Issues

If a child has issues, such as mental illness, substance abuse, divorce or creditors, or if the child is bad with money, it may not be appropriate to leave an outright inheritance, or any inheritance, to that child. The same is true for an estranged child. The use of trusts to provide some (protective) support for such a child may be appropriate. Occasionally, disinheriting a child is the choice some families make.

Scenario #4: Children With Wealth Disparities

Sometimes a wealthy child may tell a parent to treat them differently and give more to other siblings, or a parent may feel that a very wealthy child does not “need” the inheritance. Wealth can change over a lifetime, so this should be well thought out.

What Is Right for You?

While these can all be sensible reasons to treat children differently, these are often difficult choices for parents to make. Many parents feel that they are morally obligated to treat their children equally; otherwise, after death, the children will harbor resentment and/or sibling rivalries will resurface, irreparably damaging those relationships.

It is important to be completely open and honest with your estate planning attorney. Everyone has family issues. While these conversations can be difficult, it’s best to give your estate planner all of the family information so these choices can be considered carefully. (Also, check out the article Should You Treat Your Kids Equally in Your Will? 12 Financial Planners Weigh In, in which financial planners share stories gleaned from their years of experience. Some stories end in disaster, but others offer the reassurance of a clear path to follow.)

Estate attorney Tracy Craig is a partner and chair of Mirick O'Connell (opens in new tab)'s Trusts and Estates Group. She focuses on estate planning, estate administration, prenuptial agreements, tax-exempt organizations, guardianships and conservatorships and elder law. Craig is a Fellow of the American College of Trust and Estate Counsel and an AEP®. She has received an AV® Preeminent Peer Review Rating by Martindale-Hubbell, the highest rating available for legal ability and professional ethics.

Emily Parker Beekman is an associate with the Trusts and Estates Group at Mirick O'Connell.  The focus of her practice is estate planning, estate and trust administration, and tax planning. Emily also specializes in estate planning for disabled persons, guardianship and conservatorship matters, and long-term-care planning and other elder law matters.

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC (opens in new tab) or with FINRA (opens in new tab).

Tracy Craig, Fellow, ACTEC,  AEP®
Partner and Chair of Trusts and Estates Group, Mirick O'Connell

Estate attorney Tracy Craig is a partner and chair of Mirick O'Connell's (opens in new tab) Trusts and Estates Group. She focuses on estate planning, estate administration, prenuptial agreements, tax-exempt organizations, guardianships and conservatorships and elder law. Craig is a Fellow of the American College of Trust and Estate Counsel and an AEP®. She has received an AV® Preeminent Peer Review Rating by Martindale-Hubbell, the highest rating available for legal ability and professional ethics.

 

With contributions from