When it comes to estate planning, one of the most challenging decisions parents face is how to divide their estate among their children. While the concept of equality might seem like the simplest and fairest approach, the reality is often more complicated.
It is important to remember that what is fair does not always mean equal. Moreover, there are various factors to consider when making this crucial decision.
Factors that may influence asset division
Several factors can affect how parents choose to distribute their assets among their children. These include but are not limited to:
- Individual financial needs: Some children may have greater needs due to various circumstances, such as disabilities, health conditions or financial strain. You might consider giving more resources to children facing financial challenges to ensure their long-term stability.
- History of financial support: You may have already provided financial help to some children throughout their lives. This could include paying for education or helping with a home purchase. When dividing assets, you might factor in this previous support to achieve overall fairness.
- Caregiving contributions: Children who take care of aging parents often invest significant time, energy and sometimes their own finances. Some parents might recognize these contributions by leaving a larger portion to caregiving children.
- Consideration for grandchildren: Some parents may factor in the needs of grandchildren when dividing assets. This could involve setting up trusts for grandchildren’s education or providing additional support to children with larger families.
- Tax implications: The distribution of certain assets may have different tax consequences for each child. You may want to structure their shares to minimize the overall tax burden.
By carefully considering these factors, you can strive for a fair distribution, even if it does not result in an exactly equal split.
The role of legal advice in estate division
Dividing assets equally among children is not always the fairest approach. Parents should consider each child’s unique circumstances and communicate openly about their decisions.
Given the challenges, seeking legal advice is often beneficial. An estate planning attorney can guide you through the process, help document your wishes and assist with any issues that may arise.