Dividing your wealth equitably among your children often makes sense, especially when their stories and circumstances are similar. Equitable distribution can also avoid family conflicts over equity or favoritism. The standard advice among experts is to divide your estate equally among your children. Dividing your inheritance equally among your children means that everyone will receive the same amount.
If you have two children, each one will receive 50%. If you have five children, you will each receive 20% of your estate. Generally speaking, IRAs and other tax-deferred accounts must have all children as equal beneficiaries. Usually, these accounts are outside the estate.
A home can be left in a trust or will, with instructions for the house to be sold and all assets divided equally. Should inherited money be divided equally among family members? Even when parents intend to divide the estate equally, their plans can go wrong and leave children with inheritances of different sizes. This usually happens when parents leave different types of property to different heirs. For many families, treating all children equally is the right choice.
It certainly makes things easier after there has been a death, there are fewer hurt feelings, and makes it easier to divide the money or possessions that are left. If you have children with very different needs or very different agendas, your estate plan will need to consider that. Parents who leave their children an unequal inheritance risk fueling family disputes. But strictly equal legacies can also cause resentment if heirs don't see distribution as fair.
He recently advised a client who had decided to put all her children's inheritances in trusts that marital problems were her motivation for not telling her very vocal children her decision. In fact, in the IZA article, the researchers found that “complex families are the main drivers of this trend, since parents with stepchildren are less likely to plan equitable actions. As a result, the parent may want to leave more money to the other children to account for the difference. Be sure to tell your children who inherits (or doesn't) what and your reasoning for it.
If you are not in love with your child's spouse, or are simply worried that the next one will be worse than the previous one, you may also want to leave that child's inheritance in trust. At the same time, the study also found that the longer the relationship, the more likely it is that the father will leave the inheritance of the stepchildren the same as that of a biological or adopted child. To avoid conflict between siblings, parents should explain their decision to each child individually or as a group, or even seek mediation, said Arline Kardasis, co-founder of Elder Decisions in Norwood, Massachusetts. When the father ignores past gifts and opts for equal shares, children who received less help during the father's lifetime may resent that decision, lawyers say.
An Ameriprise survey, for example, found that among siblings who fought for money as adults, 70% of fights involved problems with parents, such as how an inheritance is divided. Below you will find answers to some of the most common questions from readers about 7 reasons why your children shouldn't always receive the same inheritance. One of the most common reasons is that a child has been the “family caregiver,” and the parent or parents want to reward or compensate that child for their time and effort. Carcone once had clients whose son was much richer than his siblings or parents, for that matter.
Regardless of how you decide to divide your assets, if you think you have good reasoning for not dividing your estate equally, sit down with your children and tell them what you are doing and why. Kardasis mediated a case in which the father asked two successful children how they would feel if he left a larger inheritance to a third child, who had financial and health problems. .