It was a recurring rejoinder in every Smother's Brothers sketch. Back in the 1960s, Tom and Dick Smothers entertained audiences with their folk songs and humor. The humor routinely interrupted their folk songs as an argument would break out over anything or nothing.
Eventually, Tom would declare that "Mom always liked you best!"
While that is a great line for a sibling to deploy in a musical comedy act, it does not play well when it comes to estate planning.
Say you want to treat your children "uniquely" and not "equally" in your estate because some have grabbed the brass ring of life's carousel while others apparently did not know there was such a ring (or even a carousel to ride).
Do you give the under performing child more to "even things out"?
This issue was taken up in a recent Millionaire Corner’s article titled “Dividing the Estate: Treat Your Children Well.”
The article is directed to parents with children who have different levels of personal and financial success. It acknowledges that parents may want to do more for the struggling child than for the successful one when divvying up their estate assets.
I mean, after all, once a parent always a parent. Right?
But it is not that easy.
While one may think about providing extra assistance to a child with fewer resources, or for a child with special needs, you need to do so cautiously. The article also reminds us that the status of the children can change over time and on a dime, making a strong argument for equal distribution.
The future is very difficult to predict with pinpoint accuracy.
However, if you do decide to divide your estate unequally, it is prudent to explain your plan to all of your children right away. Address any of your concerns for each of them. And hear them out, too.
The article makes a good point when it comes to giving money versus things.
If you choose an unequal distribution, you might consider giving more "money" to the children who need it most, and the more successful children could receive more of the "family heirlooms" with emotional value and perhaps a higher resale value. Think Antique Roadshow.
In addition to the inheritance aspect, do not neglect careful consideration of sibling dynamics when appointing agents (i.e., for your "general durable power of attorney" and "advance health care directive"), personal representatives (i.e., for your "last will and testament") and trustees (i.e., for your "living trust" or "testamentary trust" created under your will) to serve under your estate plan.
Some parents appoint adult children to serve in these important roles, but the article warns against this. The size of the estate and the complexity of assets are two considerations, but the emotional stability of the family members who will be benefitting from the estate is also important.
When one person in a family is given authority or power over others, there is always a chance problems could arise.
Children may all get along now—but could that change when money is involved or issues of control arise?
It might. This is another opportunity for an avoidable Smothers Brothers moment.
When choosing an heir to administer your estate, you should think about whether to compensate that person for the services he or she provides. Once you make a decision, you should again talk to your children and be open about the rationale behind your thinking.
This conversation should include WIIFM ("what's in it for me?"), so each of your children understands why your decision benefits him or her, in addition to why you have chosen a specific person.
For example: "I am appointing your big brother to make sure everything goes according to Hoyle after I am gone. As a result, each of you will share in the roses, but he alone will be the one to deal with the legal, financial and tax thorns. Therefore, I am leaving him Aunt Ethel's ceramic bullfrog collection in appreciation for his future services when completed. Is that okay with all of you?"
Consequently, your children will be happy to know that you trust all of them with this information. In the end, they will be more likely to honor your wishes without any serious Smothers Brothers moments.
To make sure your estate wishes are executed as you want, only an estate planning attorney can make certain everything is legally binding and proper.
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: Millionaire Corner (March 12, 2015) “Dividing the Estate: Treat Your Children Well”