There is a difference between an "equal" inheritance and a "fair" inheritance. Unfortunately, that difference is commonly in the eye of the beholder. As with most of life's lessons, it is best to learn from the mistakes of others.
If the majority of assets are tied up in a business, for example, then it may be prudent to leave the business to the child who is active in the business. Otherwise, the business may not run efficiently or may fail completely.
However, even when there are good reasons for leaving everything to one child, disinherited children will often choose to fight in court.
A recent article in The New York Times, titled “In Inheritance Battle, Judge Sides Against Perelmans,” reported on a legal dispute over the estate of billionaire Robert Cohen.
Late in his life Mr. Cohen was sick and changed his estate plan. He had a son and a daughter. It appears Cohen decided to leave everything to his son, as it was his desire for the son to carry on the business.
However, the daughter was married to the wealthy chairman of Revlon. This son-in-law and Mr. Cohen’s daughter both attempted to contest Cohen's will. They claimed that the inheriting son had manipulated Mr. Cohen. A judge in New Jersey decided otherwise and ruled in favor of the son.
With the significant dollars at stake in the Cohen estate, it may not have been possible to prevent a legal fight between the family members. Nevertheless, there were steps that could have been taken to make such a battle less likely.
For instance, it would have been better for Cohen to finalize his plans before he was dying. You should never wait until the last minute to make (or change) an estate plan. That does not leave time to explain to your family why you are doing something unusual.
Had Cohen acted earlier, he might also have been able to rearrange assets and divide them more equally between his children while still leaving the business intact for his son.
Again, it is best to learn from the mistakes of others, so you do not repeat them. I think the teaching point here is to have regular reviews of your estate plan so everything stays up-to-date.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference New York Times (June 25, 2014) “In Inheritance Battle, Judge Sides Against Perelmans”