When your children were young, you did your best to treat them fairly. You let them know you loved them equally and avoided giving preferential treatment to one of them. Not only did this help your kids feel equally loved and valued growing up, it also taught them that everyone deserves to be treated with respect (at least until they prove otherwise).
But when it comes to estate planning, fairness and equality are not necessarily the same thing. While many parents choose to divide their legacy evenly among their children, that is not the best strategy for every family. Automatically giving each child an equal share of the pie might not reflect the reality of their lives: their income, prospects, health, and relationship with you.
Real-life reasons not to give your children equal shares
For example, let’s say you own your own business and have two adult children. One of your children has worked with you for years and has contributed a lot to the company’s success. Your other child has never shown any interest in the family business. Does it seem right that each of your children should get a 50 percent ownership stake after you pass away?
In some cases, this may be fair. But many business owners would be more comfortable leaving the firm in the hands of the child who has proven they can keep it going, even if it means the other child’s inheritance is smaller.
In other families, one child has special needs and is unable to earn an income or to care for themselves. Parents may need to set up a special needs, or supplemental needs trust to protect their benefit eligibility while providing for additional care.
And then there are the sad instances where one of the children is no longer in the parent’s life as a result family conflict, abuse, and/or addiction issues.
In short, every family is different. Your estate plan should be tailored to your specific needs, concerns and goals.