Should I Assign Assets in My Estate Plan Equally or Fairly?

 Posted on October 04, 2018 in Estate Planning

In most cases, the assignment of assets to a single heir is straightforward; you only need to determine a creative way to decrease the tax load. By contrast, assigning assets to multiple heirs is generally more complex. Not only do you have to determine how to increase the overall amount each person receives after their tax liabilities but you must also discern whether to distribute the assets fairly or equally. What is the difference between these two options, and which one is most appropriate for your estate planning needs?

Fair or Equal: What is the Difference?

While some people use the terms fair and equal interchangeably, the two terms are quite different from one another. To split things equally means to give everyone the exact same amount, but fair distribution is not always equal. Sometimes, it may appear that one heir is getting “more,” but the truth is that they are getting more for a very specific reason.

Determining What Constitutes “Fair”

Fair can mean something different to everyone. For example, children who see another child with more food or a later bedtime might cry, “Not fair!” – even if the other child is older. Fair is much like this; it determines what is appropriate to give in terms of responsibility or amounts by weighing various factors. Asset fairness is no different.  

As an example, assume you have a child that has stayed nearby to help you with all your needs. They have gone with you to every doctor’s appointment. They have visited regularly to clean, go grocery shopping, or cook for you.  You also have another child – no less loved or special, of course, but they have been busy managing their own family. After college, they took a job on the West Coast, got married, and had children. Truth be told, you cannot remember the last time they visited. You, as their parent, know this is not due to a lack of gratitude or a lack of love or caring. It is just that they pursued a different path. However, it does present you with a difficult decision, does it not?

While, on one hand, you want both of your children to know that you loved them equally, you have one that made special efforts to care for you as you aged. You want to show your gratitude, or maybe you just want to compensate them, in a sense, for all the time and effort they put into making sure you were okay each day. Whatever the case, you feel a higher asset distribution is just “fair.” There is nothing wrong with this. It is also not the only way to determine fair. You know your heirs best, and you know what they should receive. Go with your instinct.

How Our Lombard Wills and Trusts Attorneys Can Help

At A. Traub & Associates, we understand just how complex asset division can be. It is why we offer comprehensive and personalized services that are designed to suit your needs. Learn more about how our experienced DuPage County estate planning attorneys can assist you with your estate plan. Call 630-426-0196 to schedule your confidential consultation at our office today.

Source:

https://www.forbes.com/sites/markeghrari/2017/04/30/why-your-estate-plan-may-divide-assets-equally-but-not-fairly/#47b7efc3760a