When drafting their wills, parents must consider how to divide their inheritance among their children. Every family is different, so every will is different as well, leading to many different inheritance situations. The last thing any family wants is heirs disputing a will in court over an “unfair” inheritance.
Parents can split their inheritance in any way they choose. So how do parents divide their inheritance equitably?
Different methods for dividing assets
Parents may choose almost any distribution plan, but concise plans with clear instructions hold up best through probate. Parents with multiple children often divide assets along these guidelines:
- Equal-dollar distribution: Every heir receives the same amount with equal distribution. Though equal, some heirs may see this as “unfair.” Heirs who have contributed to the family financially may feel they deserve more, while heirs with financial problems may resent their wealthy siblings who do not “need” the money.
- By need: Some siblings may have a greater need for the money than others. Heirs may resent others for receiving more or consider their smaller share a punishment.
- With gifts deducted: Some parents may have a financial relationship with an heir already, perhaps allowing access to an inheritance before the parents pass. Their inheritance might reflect the funds previously deducted.
- Funding for a family-owned business: If an heir or heirs took on the responsibility of running the family-owned business, parents might leave them a larger share of the inheritance.
Parents may also completely customize their distribution plan, especially considering assets or heirlooms with inherent value. However parents divide the inheritance, an heir may feel slighted. Colleen Carcone, co-author of “Principles of Estate Planning,” recommends transparency during the drafting process. Asking the family directly how they feel with open discussion and honest goals may result in a distribution plan that satisfies everyone.
Consider legal help
Most people looking to draft a will or estate plan find success hiring a local attorney. A lawyer will help find answers for the difficult questions about power of attorney, living wills and funeral arrangements while the family can focus on each other.