Showcase Listing

Traditions of America is excited to bring the 55+ Live Better lifestyle to Bethlehem with its latest community - Traditions of America at...

Image
Showcase Listing

Discover the distinct difference in active living, nestled within the scenic beauty of historic DeLand, Florida at Cresswind at Victoria ...

Image
Showcase Listing

Bon Ayre is a 55+ active adult, manufactured home land lease community located in Smyrna, Delaware, a town which was recently ranked 31st...

Image
Showcase Listing

Traditions of America is excited to bring the 55+ Live Better lifestyle to Richland Township in Pittsburgh's North Hills with its latest ...

Image
Showcase Listing

Traditions of America at West Brandywine, is a brand new active adult community in the most sought-after Philadelphia suburbs. Located in...

Image
Showcase Listing

Nestled in the foothills of the Great Smoky Mountains, Tellico Village comprises over 5,000 acres along Tellico Lake. Established in 1986...

Image

Estate Planning: Is It Fair to Leave Different Amounts?

Category: Financial and taxes in retirement

June 23, 2020 — Note: This article starts with the premise that it is crucial for every person of retirement age (and younger) to have a will and/or an estate plan, no matter how small the assets you own. If you don’t have a legal document, you are going to leave a huge mess for your heirs to clean up, you will waste money on probate expenses, and perhaps end up with a result you wouldn’t like.

Every family is different in so many ways. Couples might have children that are equally successful and get along well. But for family like that there are those with a child who has had a hard time, a disability, or other issue. Families with stepchildren face additional challenges. Many people worry about a child they feel is not responsible, and who might squander any bequest on drugs, gambling, etc. There might be a family business where one or more siblings, but not all, are actively working. It can get very complicated. And, your children probably know if have already substantially helped one child financially more than the others.

Even with the best planning divvying up an estate can cause problems. If you divide everything equally, the child who has greater needs might feel neglected (and you might feel guilty). If you give more to the children who need more, the others might feel like they have had a success tax levied against them.

Nerdwallet recently published an article, “Should You Leave Your Children an Equal Inheritance“. In it, Colleen Carcone, a tax and estate planning attorney and co-author of “Principles of Estate Planning” says that: “Money can cause family discord, and you want to make sure that you are thinking through this and keeping sibling relationships intact.” One of the key pieces of advice mentioned in that article is the need to discuss your plans in advance with your children or heirs. If you discuss things you might find out, for example, that your wealthier children might not be interested in money, but perhaps want a particular heirloom. You might many valuable or sentimental objects, and finding out preferences would be useful in avoiding battles later on. If you discover that your heirs have unrealistic expectations or splitting assets might cause problems, you will see the need to be more specific in your plans. Family businesses have unique problems, particularly when not all members of family work there.

Carcone also advocates leaving a detailed letter behind that explains your decisions. She posits that this can help stave off family feuds because at least your heirs understand your wishes and motivations better.

Vacation homes are another hot spot for estates. Even when all the children get along, splitting a home in a popular and nostalgic destination can be problematic. By discussing this in advance you might get a better understanding of the issues that could come up, and find a solution that serves the greatest good.

Bottom line. If you don’t have a will and a letter, get started on it. If it has been a long time since they were written, do a refresher. Schedule a talk with your children so they know your plans and you understand what their preferences might be. Please write your experiences and thoughts in the Comments section below.

Posted by Admin on June 23rd, 2020

15 Comments »

  1. Good topic! We’ve all heard stories about the “bereaved” getting really mad after the will is probated. And discussing plans ahead of time can also cause some issues if their isn’t agreement amongst the future heirs (a colleague’s family was torn apart BEFORE the parent died because of such a discussion). Our plans are pretty simple and do include treating our heirs equally in the Will. That said, we are considering changing the executor from one of them to an uninterested 3rd party. Depending on the estate there can be a lot of work involved and the executor deserves to be compensated for their work. If the executor is also an heir, other heirs (esp those who have a paranoid streak) might get a little miffed if the executor who is also an heir takes a fee, or doesn’t complete the work quickly enough, or doesn’t sell real estate for what the others think it is worth, etc. etc. ).
    If we need assistance and rely on family members for help we’ll pay them generously for their efforts when they help rather than leaving them extra in the Will.
    As for a what to do with a vacation home, I’d think that sort of thing should be sold and the proceeds distributed to the heirs. If any of the heirs wish to purchase it either alone or with other heirs that’s up to them to work out. They might want the house if it’s “free” but if they have to buy it suddenly doesn’t mean that much to them.

    by Jean — June 24, 2020

  2. For folks with multiple children, one of whom perhaps is poor with money (substance abuse, tons of debt, etc), they can consider skipping a generation only for that child. That way the folks’ inheritance doesn’t just go to drugs/booze or debt collectors, but rather to the grandchildren where it can hopefully be put to better use. We had this situation, but fortunately my brother turned himself around and got out of his “issues”, so my father amended his estate back to equal treatment (only with the $, not for successor roles). Since my Dads still alive, these details are only known by a couple of my siblings (big family), so no lost face.

    My Dad was cautioned by his lawyer to NOT explain his estate decisions via posthumous letter, as the “aggrieved heir” could use that as ammunition to argue against how they were treated. Any posthumous letter should not link to Inheritance treatment.

    by Greg W — June 24, 2020

  3. My family was torn apart beyond repair by inequities in the distribution of my parent’s estate. Originally, the decisions on whom was to receive what were fair, and discussed with each of we four siblings. We were okay with it. BUT, as dementia and Alzheimer’s stole my Father mind, he lost his hold as head of the family. My Mother was then free to change and overturn their agreed-upon decisions, and exercise her blantant favoritism with no restraint. She chose one grandchild to place over and above the other eight, and over and above her own four children–setting us all against each other. An expensive, lengthy, and bitter legal battle ensued. In the end, there was no way to restore our family, or heal the wounds. As a result of that experience, I am determined that my two children will be treated equally and fairly, 50/50 across the boards–no exceptions. While each one is distinctly different, and each has both capabilities and shortcomings, I refuse to show favoritism–it is not the legacy I choose to leave.

    by Barbara — June 24, 2020

  4. A will doesn’t always help.

    After my father’s death, my mother eventually yielded power of attorney to my brother, who rewrote the will, cutting me out completely.

    I didn’t learn about it until she died. I couldn’t afford a long legal battle (I live several states away), so contrary to my father’s wishes, I got nothing.

    by Scott — June 24, 2020

  5. I agree with Jean that this is a great topic. I always intended to leave my estate equally to my kids. They’re all self-supporting, fiscally responsible young professionals.

    However, my estate lawyer asked me about special bequests in my updated Will. This triggered a dilemma. My problem is what to do with my engagement ring. My deceased spouse designed it himself and had it made for me almost immediately after meeting. (Very romantic story leading to a 30 year happy marriage.) The ring is priceless IMO, but it also has a very valuable diamond and an appraised value high enough to buy a house. One kid thinks the ring should just be sold & money divided. Another kid doesn’t want the ring to be sold, but has a spouse who strongly believes it’s an ostentatious waste of money that could be used to benefit charitable causes. Kid #3 is about to get engaged. Since Kid #3 & his future spouse (both in early 30s) both have doctorates and assets, they plan to have a prenup. They are ok with requiring this ring be kept in our family and be passed to a descendent under similar conditions, to ensure it remains in the family for at least another generation or two. They can also afford to insure it. The other kids are saying they’d feel weird about someone else wearing the ring.

    I know it’s just an object. Dividing the money would be fairest – but selling it would break my heart. I’ve thought about giving the other kids assets to balance the ring’s value. So far I haven’t figured out how to do it fairly, since the ring doesn’t actually have a cash value if it ISN”T sold. I also realize that we can’t control things after we’re gone. The kids have agreed on who would be the executor, and other future estate matters. This ring is the last open question and the only thing that everyone has different views about. Eventually we’ll figure it out. I’m hoping to get to a consensus that will minimize hurt feelings and strife while I’m alive.

    “Things” can cause as much grief as money, and hurt feelings about money/estates can break families apart. We’ve all seen it happen. Now for a bit of philosophy: When I was in grad school, I went to a lecture by a divorce lawyer. I remember him saying that even the friendliest divorcing couples will always argue about something towards the end of the property settlement, no matter how much they want to be divorced or how irrational the argument appears to bystanders. Whether it’s custody of the pet, a piece of wedding china, a small appliance or something similar — he could guarantee an argument of this kind would take place. He believed the real problem wasn’t any particular petty item that would be the basis of a fight, but that it was actually an unconscious emotional resistance to finalizing the end of the relationship. Family fights & bitterness from finalizing estates seems to be similar. Old childhood resentments, labels about the “favorite kid”, hurt feelings, etc. seem to be replayed by families before estates are finalized. I’m hoping to get my kids through as much of that process as possible while I’m still here to do it.

    I’m hoping we get can this resolved while I’m still alive.

    by Worried Mom — June 24, 2020

  6. My friend Laura is a wonderful example of having her priorities straight. She is an art teacher who works in low-income neighborhoods. She loves her students and pours herself out for them, but has never earned much as she does not have the required Master’s degree to work in public education. (She was a single mom when she obtained her bachelor’s degree.) She is currently single as well.
    Her two sisters are married and have extremely high family incomes. Laura never wanted her parents’ money to be split any way but equally, which it as upon her mother’s death. She has a warm and loving relationship with her sisters and her entire extended family. It seems to me she chose the better way.
    Now i know every situation is different, so i don’t write this to judge anyone else’s situation. Just to point out a good one!

    by ella — June 24, 2020

  7. My parents left money to my sisters and their families but none to me and mine. We were estranged but it was more of them living with one sister and relying on her and her husband for everything. My dad changed the will when he had dementia and my mom was gone.
    Let me tell you it is like a knife in the heart. Besides those 2 yrs we were apart i did so much with them. Always there. My sisters and i finally have a relationship but it will always be there.
    Ultimately it was my parents money and their choice. I still love and miss them all the time.
    My husbands parents were LDS and only gave money to those following the faith. My husband and I took care of them at the end, and we knew we would be getting nothing. We didnt. But the kids that didnt help and were still active received money.
    This is why I say spend your money while alive or give it all away!!!!

    by Tomi — June 24, 2020

  8. This topic certainly hits close to home.

    My husband died due to an inaccurate diagnosis. He began legal action before his death (wrongful death) and I continued it at his request, after he passed.

    His will had left everything to me, as mine did for him. Since we had a blended family, we felt that was the best way to avoid any issues.

    We won the law suit, and before I had received the papers of determination, I was hit with a law suit, from my step children and my own 2 children. They wanted at least half of the settlement.

    My husband did not believe in life insurance, so there was not much to begin with. One of his daughters had not spoken with him in 10 years, my daughter had not spoken with us in over 2 years. His other two sons had only spoken with him infrequently and our daughter together – we would speak with infrequently. She is the only one who actually came to see him before he died.

    I was in no state to battle it out with my children. The horror of what had happened to my husband of 30 years had devastated me, and I did not have the money to continue to pay the attorney to fight them. I agreed to give them an amount substantially less than what they were demanding, and that was the end of it.

    I will never see or speak with them again.

    Even though my husband had a Will, his estate was still distributed according to the laws of our State of residence; in this case, Michigan. I would caution anyone to be very aware of the law of your State, and never, even for one second, imagine your children will be above the greedy pull of money – even if it leaves you, their parent, in the dust.

    by Lynne — June 25, 2020

  9. My great grandfather had a unique situation in that he decided that his estate would only go to his children and descendants related by blood. He had been an inventor and was very successful in various ventures during his life. My grandfather, who was his second son, died in 1988 and so that left my still living grandmother out of the will even though they had been married nearly 60 years, and the money that my grandfather would have inherited passed on to their children, my father and my aunt, once his second wife died in 1994 .My great grandfather had six children three by his first wife from which I descend and three from his second wife. Everyone knew his wishes and it was amazing to me that there was no discord among the relatives. Most of them were in their 70’s and 80’s by the time his second wife died so at the age of 98. So if one married into the family then they were automatically cut out of the will.

    I feel inherited money is a gift once received and that it should never be anticipated. Your parents money is their money to do with as they please and if they want to give it all to charity upon their death, that is their right. I have seen too many people fight over an assumed inheritance or who feel that their parent’s money rightfully belongs to them even before their parents have died. This is flawed thinking. Do not count your chickens as they saying goes…

    by Jennifer — June 25, 2020

  10. Lynne – thank you for your caution about state laws. That is something we plan to look into, now that you brought it to our attention! Just in case!

    My father just passed in May, at 95. He had written a will and created a Trust some years ago but last year as he and my sister (who lives closest to him) reviewed the docs and found several errors. In the originals. Everything he owned was to be split evenly among his 4 children. During the re-writing process, he began to realize that his youngest, my brother, was a neglectful husband and father. My sisters and I have been angry with our brother over the years and he hasn’t changed. When Dad discovered that his son could be arrested, if he ever accompanied his daughter to a Dr., for criminal neglect, Dad changed the arrangements.

    The Pour-Over Will leaves everything to the Trust. The Trust then, designates that my brother gets a set amount ( Dad felt obligated to leave him SOMEthing), several charities are also mentioned, then it says that the remainder is to be split between the three daughters. That was clever! When my brother read the Trust – all he saw was the dollar amount he was getting and since there was no actual dollar amount assigned to his sisters, he assumes he is getting the lion’s share and is happy. Win-Win!

    My sister, who lives closest, has spent her time caring for Dad (along with hired help) and she has been compensated along the way for that. As Trustee, we expect her to take additional funds for her time and efforts! Fortunately, the three sisters have all agreed on how this falls out and have bonded well over this. Once the dust settles and Covid-19 backs off, we looks forward to taking ourselves on a one-time sister’s resort week at the beach!

    As for me – all three of our sons are successful, working and putting $$ in the bank. They know that we have left everything to each other with the ultimate split three ways when the last of us dies. We even added a clause that our one Daughter-in-law gets half of what her her husband would get, should he pre-decease us. We know that he would expect to provide for her! {Now that there are grandchildren, we need to revisit that. We will NOT leave $$ to minor children as it creates unnecessary legal headaches!! But, that is for another day.}

    I will also say that I have seen friends have to deal with damaging Trusts and most often, they are just a random boiler plate template that any Attorney can pull off the internet and have a person sign. We were fortunate enough that my sister found an new Attorney that carefully listened to Dad’s plans and concerns and created a custom document to make it all so! I caution all of you to review your wills and Trusts. Have them reviewed by another Attorney – errors can negate your wishes, render the document invalid and an unreasonable Trustee can milk it for their own gains. Let us all learn from each other!!

    by Flatearth6 — June 25, 2020

  11. Well…I guess I was blessed being the only living child when my mother died. I moved in with her when she developed dementia and was full-time caregiver for 5 years. I still had to go through the probate process but was able to sell her condo and now able to not worry so much about my retirement years. It’s sad to read some of these comments.

    by Mary11 — June 25, 2020

  12. Reading these accounts of family rancor/disputes/greed, it is so rewarding to us that our two sons treat all such matters based on love and equity. Now in their late fifties, they have resolved every financial matter based on respect and care for each other. Our wills treat both equally, and know they will treat each other with similar love and concern for the well-being of the other.

    by JGrady — June 25, 2020

  13. There are a lot of siblings in my family. Our parents asked us frequently what objects or mementos we would like to have and spent a lot of time and thought on it. Everything was marked and in their last years when they downsized most of the items were distributed to us. Some children who weren’t as well off got a little more from the estate when it was settled, but we all knew this in advance and everyone was good with it. Worked out very well – talking about it in advance was key, along with knowing that they wanted us all to be happy and feel we were treated fairly. Even though they had a solid will and did lots of preplanning, settling the estate was still time consuming for the sibling who was chosen as executor. It made me realize you do your children an immense favor by preplanning and taking care of things as much as you before you get too old.

    by Rick — June 25, 2020

  14. Rick – you are SO RIGHT about pre-planning and discussing things with all the family! My father knew he was weakening and added my sister’s name to his checking account. He then had her write out checks to pay bills and other things ahead of time to see if there would be any resistance. By the time he passed, she had a working relationship with the insurance reps, finance/investment rep, bank, attorney and staff where he lived. Lots of phone calls and e-mails kept the rest of us informed and we made calls and suggestions as we could, from far away. You are right that the estate still takes time to “settle” – even with a trust in place – but it has been so much easier for her to navigate.

    by Flatearth6 — June 26, 2020

  15. In reading some accounts, every state handles probate, wills and trusts differently. If you move to a new state as a permenant resident you must update your will to reflect the state laws you have moved to.
    Make sure you also consider your living will wishes, to make those decisions are easier for your children and your desires followed.
    Our attorney meets with us every two years to see if our lives or wishes have changed. Also to discuss any new laws the federal or state govnerment have passed that effect our trust and wills. Such as the Setting Every Community Up for Retirement Act passed in 2019. Which changed the RMD, but also inheritance and how it is taxed to your children/relatives.
    As difficult as it is you must discuss with the child/children the end of life wishes and documents. Our daughter has copies of the trusts and wills and joins the conference call when we meet our attorney.
    There are several books you can buy (ours is called: I’m Dead, Now What) which provides important information about belongs, business affairs and wishes…Its put together very well and not like your will, but general info like pass words, which accounts are direct deposit and paid. People you may want to have contacted about your death that your children may not know, like work associates…..Plus many more valuable contacts they may not have any idea about. Check it out well worth it. Also, as an example, I want my granddaughter to have my diamond errings or a watch to a certain grandchild.

    by Bruce — June 26, 2020

RSS feed for comments on this post. TrackBack URL

Leave a comment