Will Your Children Think You Were Fair?
Will Your Children Think You Were Fair?
Parents are often committed to being fair to their children. The desire to be fair comes up when planning an estate and determining how to split the “wealth” among descendants. Not every child is guaranteed an equal sized piece of the pie. Below are a few of the considerations to keep in mind.
When it comes to inheritances, bad feelings and old wounds can be triggered. Equal distributions can make all parties feel that parents were fair. But does an equal and proportionate distribution of an estate really equal fairness? Not always.
To begin, not all children are equal. Children may have different financial resources. Parents wonder if it is fair to divide an estate evenly when one child has greater financial resources than another.
What is the measure of fairness if one child has a disability or other health challenges? In such cases, the scale can be tipped in favor of an unequal distribution. This is particularly true if the child with challenges has not been able to achieve the same kind of financial stability as a “healthier” sibling.
Sometimes one child has needed and received more financial help from parents than the other. Was the financial assistance in the form of gifts? Were these transfers really a down payment on the later inheritance?
Parents struggle over whether an equal distribution from the estate after death is fair to the child who received less during their lifetime. There might need to be an adjustment in the will as between the siblings for the sake of fairness. Sometimes that adjustment takes the form of a “credit” to rebalance earlier unequal distributions.
I believe you should not make the mistake of excluding a wealthier child from inheriting assets. The wealthier child might believe that their parents didn’t love them as much as their sibling. Using transfers of wealth to measure love might not make sense, but emotions are often irrational. If an unequal distribution is planned, the parents might make clear that the inheritance is not a measure of love.
Some parents will use their estate to send a message. A child who has been inattentive or has shunned their parents might be excluded from inheriting. The exclusion of a family member is also a result of a fairness calculation. The parent might argue that it is not fair to benefit a wayward or inattentive child when other children have been loving and caring.
On the other hand, a child who provides end of life care might be the focus of a parents’ late in life largesse. Is it fair that one child receives a greater share because they served as a caretaker? Consider this. An adult child might take a parent into their home or move in with the parent to cares for them over the course of years. In preparing a will or trust, that parent might believe that fairness dictates a larger share of the estate to compensate the caretaker child for their time and expense. Or the parent might want to express appreciation through a bequest. Each child will have a different view of fairness in that situation.
Another example of the fairness debate comes with bequests to grandchildren. An example: One woman paid for the private college education all her grandchildren. Yet one child had two children while the other had three. Did the child with two children deserve a larger share of the parents’ estate because her family had benefitted less with regard to tuition payments? This too is an issue of fairness that rips families apart.
Communication is the key to family harmony. While conversations about death and estates are difficult, leaving children embittered after your demise is worse. If you invoke fairness as the motivation for estate distributions, then your children might be eager to have a conversation. The benefits of communication are that children are less likely to be resentful when they are informed and part of the decision-making process.
Losing a parent can be among the most difficult life events one experiences. Bewilderment and disappointment upon learning of an estate distribution can add to the pain. As you strive to be fair, consider the ways to make your good intentions clear. Remember you not only leave financial resources but also an emotional inheritance.
Evan J. Krame
Parents are often committed to being fair to their children. Let’s consider if bequests have to be equal to be fair.