If you are a parent, you likely understand how important it is to have a comprehensive estate plan in place, particularly while your children are young. As a parent of adult children though, one of the most difficult aspects of estate planning is deciding whether or not to divide your estate equally among your children. Most parents find themselves conflicted on this issue with their head warring with their heart. Why is this such a difficult decision and is there a right and wrong answer?
Estate planning when children are still young is relatively simple, at least with regard to how the estate assets should be divided. Because the children are still minors they cannot inherit directly. Therefore, most people choose to pool the majority of their assets together and either leave them to the children’s other parent or hold them in a trust for the children’s benefit. Consequently, there is no need to decide how to divide the assets among the children. When your children reach the age of majority, however, that all changes and estate planning becomes considerably more difficult.
Deciding whether to divide your estate assets equally among your adult children or not is certainly not an easy dilemma to resolve. On the one hand, choosing not to divide your estate equally will almost certainly lead to hurt feelings, if not full blown resentment, among your children. On the other hand, choosing to divide your estate equally could be the equivalent of throwing your money in the trash if you have a child that is likely to squander, or otherwise lose, the money.
There is no right or wrong answer to your dilemma; however, one thing you must do is be realistic and honest with yourself when evaluating your options. This is not the time to bury your head in the sand and ignore obvious issues. For example, if you have a child with a drug or alcohol addiction, or a gambling problem, you need to acknowledge the issue when deciding how to handle your estate. Likewise, if you have a child who is in deep financial trouble, or who is likely heading for a nasty divorce, you need to consider how these issues would affect any inheritance you left the child.
One option that may allow you to ease your conscience while still protecting your hard earned assets is to hold those assets in trust for your child just as you did when he/she was young. Keeping assets in a trust protects them from creditors, spouses, and even spend-thrift beneficiaries while still making them available to the beneficiary for legitimate needs/expenses.
If you have additional questions or concerns about how best to handle the division of your estate assets, contact the experienced New York estate planning attorneys at The Law Offices of Kobrick & Moccia, by calling 800-295-1917 to schedule your appointment.