Having money, as they say, is a good problem. Most people, when asked why it’s important to them to have money, answer in terms of not just what it can do for them, but for their loved ones. Money allows us to provide for our families, travel and have other experiences with them, and provide our children with education and opportunities. In short, money is valuable to people because it does good things for the families they hold dear. Unfortunately, while having money is good, it can also be a very real problem when money issues cause rifts within a family.
Money is a sensitive topic, and many parents struggle to discuss it even with their adult children. They may think that their children intuitively understand their goals or intentions, or they may worry that discussing their own mortality will upset their children. Parents may even perceive that opening a discussion about money will initiate squabbling between their children. The reality, however, is that children often don’t know what is on their parents’ minds when it comes to money. Being surprised upon a parent’s death, already a time of grief and stress, is even more likely to lead to conflict.
Distributing Your Wealth While Keeping the Peace
Most experts strongly recommend that, if possible, you make equal distributions to all children. For good or for ill, children, even when they are full-grown adults, are likely to equate the size of their inheritance with the amount of your love and esteem for them. Therefore, if you choose to make unequal distributions, don’t leave your children to wonder why, and don’t assume that they know why.
You may have very legitimate reasons for wanting to leave more wealth to one child than another. One child may be an independently wealthy financial professional, while the other is in the Peace Corps. One child may have special needs or be parenting a special-needs child, meaning they need extra support over a long period. One child may have personally cared for you or your spouse for years, or may have worked in the family business while others pursued different careers. You may have, for whatever reason, advanced one child a significant amount of money during your lifetime, but not done the same for the others, and want to make sure everyone is treated fairly.
As noted above, there are many good reasons for leaving one child a greater or lesser share of assets than the others. Whatever your reasons, articulating them clearly will help your heirs understand and accept them.
Communicating Your Estate Planning Goals to Your Family
The best thing you can do to prepare your children for their inheritance is to sit down with them, together or separately, and explain what you are doing and why. Be clear that the value of their inheritance is not a measure of how much you value them or your relationship. It’s best to have this discussion while you’re able to listen to their concerns and answer their questions. However, leaving behind an estate plan documenting your decisions is better than saying and doing nothing.
There are other things you can do to make a distribution of wealth that meets your goals without tearing apart your family. If, for example, you think that one of your heirs might need extra support, but are uneasy about leaving that child more money, you might consider distributing your wealth by way of a an asset protection trust containing funds that can be accessed by any child who has an urgent need. This allows for protection of a child you perceive to be vulnerable, while not excluding any of the others.
If you are concerned that the distribution of your estate could cause a rift in your family, contact the experienced estate planning and probate attorneys at Davis Schilken at 303-670-9855 to arrange a consultation at one of our two locations in The Denver Tech Center and Golden, Colorado. Our attorneys can help you evaluate your goals for your estate plan and discuss how best to communicate about it with your family.