Treating Children Differently but Fairly in a Will

Treating Children Differently but Fairly in a Will

hand writing my last will, probateParents sometimes leave unequal inheritances to their children and just because these amounts are uneven doesn’t necessarily mean they are not fair. Decisions are often based on the needs of adult children, their achievements, major gifts that were already given, and alternative forms of estate planning.

The Unequal Situation

Parents often create their wills with the current financial situations of their children in mind. The following is an example of a scenario that a Chicago will attorney might see.

A family has three children.

  • The eldest child is moderately successful as a professional.
  • The second child is also successful but he married a wealthy spouse and lives in a multi-million-dollar home.
  • The third child struggled through her adult life and is now pulling herself up through schooling and hard work, but she is far behind her other two siblings.

The parents may assess the situations of their children and construct their wills accordingly, with some of the children receiving more or less of an inheritance than others.

Is Inequality Fair in Wills?

Children who receive less of an inheritance than their siblings may resent the uneven distribution of their parents’ assets, but parents often decide who will receive what based on need and other applicable circumstances. They might consider which of their children needs the inheritance the most and where the assets will do the most good, for example.

Estate Planning Mistakes

Misguided estate planning can lead to accidental inequalities with one or more children unintentionally receiving a larger inheritance than others. For instance, with pay-on-death (POD) accounts, which transfer account ownership to the named beneficiary upon death, these gifts will transfer regardless of the terms of the estate plan.

Another similar issue arises regarding life insurance. Life insurance policies are paid for by the policyholder and pay out insurance proceeds upon the death of the policyholder to a designated beneficiary. In these scenarios, the only way to reestablish “fairness” is if the benefiting sibling renounces a proportionate share of his or her inheritance, however, the sibling is under no obligation to do so.

Communication Cures Misunderstandings

Upfront honesty and clear communication can be very effective in resolving disputes about will distribution. Since questions and concerns are likely to surface, encouraging discussions between the children and parents allow these underlying issues to be addressed.

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