Fairness in estate planning is not always the same as making sure that everyone gets the same amount of dessert. Would you tell a hard-working kid that their lazy sibling gets more?
If you are preparing an estate plan and want to make sure that every one of your children receives the exact same amount of your assets because that's fair, you may want to reconsider. A post from New Jersey 101.5, "Being fair in estate planning," discusses the differences that take place during child rearing and even early adulthood that may redefine what you think of as fair.
While there's no easy answer to the question of what is fair, treating the children equally can be fair. But so can unequal treatment.
Let's look at how a parent treats a minor or young adult child. There are times when a parent simply needs to spend more on one child. The reason may be apparent—for instance, if one child has a disability or serious illness. But it can be more muddied when one child participated in costlier school-age activities, went to a more expensive college, or planned a more expensive wedding than the other kids. Even so, provided each child was given equal opportunities, the unequal financial support may not be a problem. Nonetheless, some parents believe that it's important to keep everything as equal as possible.
Continued parental support can be tougher when a child becomes an adult. Consider why an adult child is having financial problems. Is it because of poor work habits, a gambling or drug addiction, a divorce, or a disability? There are lots of situations with a multitude of factors, and each needs to be reviewed and handled differently based on that specific family's dynamic.
Most parents feel their children should inherit equally, but this assumes each child has similar needs and circumstances, has received similar support in the past from mom and dad, and has proven to be a responsible and capable adult. If this isn't the case, an unequal inheritance may be fair.
Providing additional financial support to one adult child over another via the parent's will should be within a parent's discretion. If so, parents need to let each child know their plans. This will help avoid surprises or hard feeling at the time of the parent's passing. Hopefully, the other adult children will not feel slighted if they understand the rationale.
Robert A. Gordon of Redkey Gordon Law Corp, an experienced estate planning attorney has seen the "fair" scenario play out in many cases and will be able to advise you about potential problems that may arise. Even with the best intention, your perceptions and wishes may not be welcomed by your heirs. However, not having a will is not the answer. If you don't have a will in place, or one that is properly prepared, state law will be applied to determine how to distribute your assets. One tip: state your wishes in a properly prepared will, and discuss your plans with your children in advance.
Reference: New Jersey 101.5 (January 4, 2016) "Being fair in estate planning"