Deciding how to pass on your assets can be perplexing.
Should your distribution be equal or fair? Most people tend to default toward equal without considering what is really fair to all of equal is fair, isn’t it?
But let’s think about it. Let’s say you have an estate of $3 million and you have three children. A
million bucks each and Bob’s your uncle. But what if one daughter is an investment banker with
a seven-figure salary and another a teacher, while your son has a physical handicap that may
make it difficult for him to work. Now equal doesn’t seem so fair, does it? Banker Betty doesn’t
need your money, while Tessa Teacher is paying for school supplies out of her own meagre
pocket and your son faces an uncertain future.
This can be a difficult decision for parents, and they grapple with what’s really fair. But it’s not
about just what’s fair to the children. What is fair to you, the parent? Is it fair for you to worry
about how your son will be able to support himself if his condition worsens while Banker Betty
fattens her investment portfolio?
This is where an advisor can really help. Work with your client to help them communicate their
decision to the children. Unequal distribution doesn’t mean that Mom and Dad love some
children more than others. It recognizes the needs of the whole family – the goal is to ensure
that every child has a secure future. Some may need more than others to ensure that security.
Sometimes the issues aren’t so starkly defined, which can cause more psychological suffering
for parents. If there are deep emotional issues involved, it may be wise to refer your clients to a
family therapist. But whatever the case, an advisor can help by lending an ear and making sure
that the whole family is involved in creating an estate plan that is equitable and gives parents
the peace of mind that comes with providing for their childrens’ secure futures.
For more information, please read:
Should Inheritances be Equal or Fair? | Wealth Management