Thinking Outside the Box: Why Passing Unequal Shares to Your Children Can Sometimes Make Sense

 In Estate Planning

If you have more than one child, leaving equal shares may not always be the way to go and with estate planning in Allen, you can plan ahead. In fact, there are some very logical reasons to consider alternative distribution. Let’s take a look at four examples of circumstances that might prompt one to question whether convention should be tossed out the window.

 

How can estate planning in Allen help you divide shares 

When it might make sense to pass unequal shares to your children:

Mother and Daughter at Graduation

Expensive Education:

Anthony and Sara have a son and daughter. Their son, Jared, received a full ride academic scholarship to a state school, and studied engineering. He did so well in his undergraduate education, that between a work-study program and additional scholarship funds, his master’s degree is also almost fully paid for. He’ll finish in 6 months and has already received two promising job offers. Their daughter, Anna, did not receive scholarship money; but when she was accepted into Massachusetts Institute of Technology, they decided it was worth the financial sacrifice. She got engaged last summer, and Sara has been helping her daughter plan the wedding that will take place just two weeks after she graduates. Between school and the wedding, Anthony and Sara will have spent close to $300k for Anna. They’ve spent a small fraction of that helping Jared through his education. Anthony and Sara have talked about wanting to do something special for Jared, but haven’t had much clarity. They’re also not financially prepared to make any big gifts right now. Since they are going in for a five-year review of their living estate plan, they’d like to talk with their attorney to see if she might have some creative ideas for reconciling the disparity down the road.

Financial Means:

Dennis and Cheryl’s oldest child, Doug, has a lucrative career in real estate. He is now in his late 30’s, unmarried and has no children. He owns his own home, as well as four rental properties – all paid for. Their youngest child, Chris, is a High school teacher and football coach. His wife is also a teacher, though she took ten years off to be at home full-time while their four children were younger. One of their kids had a childhood illness that required several major surgeries, and they have been struggling with the resulting medical bills. Dennis and Cheryl always assumed their boys would share everything they left behind, but now that they sit down and really examine the situation, they’re wondering if that’s really the best plan.

Special Needs:

Craig and Brenda have three children: John, Heather, and Rebecca. They are all in their 30’s and John and Heather are married with kids of their own. Rebecca is disabled and lives with Craig and Brenda. While Craig and Brenda certainly want to leave something to each of their children, their first priority is ensuring that Rebecca will be well taken care of when they are gone. John and Heather are both financially secure, and they also know very well the needs of their sister – they want her to be well provided for too. Craig and Brenda’s attorney helps them set up a Special Needs Trust for Rebecca so that she won’t lose any of her government benefits, and they build a trust fund with the bulk of their estate. They are thankful to be in a financial situation that will also allow them to leave a modest monetary gift to John and Heather, without compromising the high standard of care they want for Rebecca.

Blended Family:

Denise was married to Tom for 10 years and they had two daughters together. When Tom was 32, he passed away after battling cancer. Tom left his family very financially secure. He told Denise that he wanted to ensure the girls’ education, and hoped they might have a beautiful wedding as a reminder of their dad who wished he could be there. Five years later, Denise married Ben, and he had two sons from a previous marriage. When it came time to meet with their attorney to update their estate plans, Denise admitted that while she greatly desired family unity, she also had reservations about not keeping a portion of the money Tom had left their daughters secured just for them – she felt it was important to make sure his wishes were honored if at all possible. In the end, their attorney helped them come up with plan that included a trust – named in honor of Tom – for the benefit of their daughters.

Choose the best law firm in Allen to help you divide your shares

The bottom line is that no two family situations are exactly alike – and estate plans shouldn’t be either. If you do end up deciding that leaving unequal shares to your children fits your specific goals, consider a family meeting (or some one-on-one conversations) to talk with your kids about your decisions. Explain your reasoning, and let them ask questions; when you’re gone, you can’t offer them the reassurance they may need, nor correct any false assumptions or motives. As the saying goes, “communication is key.” After that, give us a call and we will help you plan your shares the way you need them to be divided.

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