When people die, they can leave behind many assets. These assets may include real estate, vehicles, life insurance policies, financial accounts, and much more. Together, they make up the deceased person’s estate.
No matter how modest or large your estate, you probably have some ideas on who receives all or part of it when you pass away. If you have children, though, you may not be sure how to split up your estate in a way that satisfies everyone.
Fair Versus Equal
For instance, you may want to be fair. Is fair always equal when it comes to dividing an estate? Not necessarily.
Consider someone with two adult children. One child earns far less than the other child. Giving the child who earns less a larger portion of the estate could seem like the right thing to do. On the other hand, splitting the estate evenly might be a better idea if the child who earns less money has been in trouble with the law or has an unresolved addiction problem. In that case, the child may be unable to handle a sudden influx of wealth.
This illustration shows one way that family dynamics can become complex when it comes to estate planning. Traditionally, many wills, trusts, and estates lawyers recommended that clients split estates as evenly as possible. Now, though, many parents are more apt to reconsider a clean division due to other factors.
Circumstances to Consider When Dividing an Estate Between Children
Parents have a lot to think about when splitting up an estate. Some of the most notable issues and realities that often enter into their discussions include:
- Biological versus non-biological children: Parents sometimes prefer to give a greater portion of their wealth to their biological children. This can be especially true in cases where they have had little contact with non-biological children over the years.
- Disabled children: An adult child with a disability may require more care over the years than the other siblings. Even when social security disability benefits are figured into the picture, the estate holder may still want to give the disabled child a larger percentage of the estate.
- Addiction and money problems: What happens if an adult child has a gambling problem or other challenge that could lead to risk-taking with money? The parent might want to give the child less of the estate, or set up a trust fund so the child receives money over time rather than as one lump sum that can be spent immediately.
- Estranged relationships: Though it may be sad to consider, some parents and children become estranged during their lifetimes. A parent may decide not to give any part of an estate to an estranged child, preferring to divide the estate between the other children.
- Eldercare responsibilities: It is not uncommon for an adult child who has taken care of his or her parents to receive a higher portion of the parents’ estate than other siblings who have contributed less to the eldercare duties.
- Child housing: Some adult children live with their parents. A child who has lived in the same house with his or her parents for decades may be given the house by the parents. After all, the alternative to selling the house might leave the adult child with fewer housing options.
- Business partnerships: Parents who are in business with one of their children are likely to pass the business portion of the estate to that child. The other children may therefore receive less in terms of financial opportunities.
Tips for Making the Right Decision When Dividing an Estate
With so many considerations, parents may struggle to figure out the best way to divide their estates between their kids. However, they can make the process easier by creating written plans, talking to their children, and working with a legal professional.
Jotting Down Your Estate Division Desires
Write down all the assets you can think of that will outlive you. Remember to make a note of everything from your employer-owned IRA to the vintage car you keep in storage. Try to estimate the value or potential value of each item if you can.
Once you have a good idea of the breadth of your estate from a financial perspective, create a list of anything that you feel is important in the estate division process. Be honest with yourself and, if you have a partner or spouse, work together to divide up responsibilities for your children to take on in the eventuality of your passing. You do not have to divide everything evenly to be fair, but you should be able to articulate why you are making choices.
Talk With Your Children
You cannot stop your adult children from quarreling after you have died when your estate is split between them. Nevertheless, you can attempt to mitigate disastrous conversations by speaking with your children about your estate plans while you are still alive.
Some parents like to talk to their children individually. Others prefer to have all their children together for estate discussion. The arrangement is up to you, and may depend upon where your children live and the relationships they have with one another.
This conversation may be difficult, particularly if one or more children feel that you are being unfair. You may be asked to justify your choices, which is why writing everything down ahead of time can help. On the other hand, your children may have ideas for splitting up your assets that had never occurred to you.
Work with a Wills, Trusts and Estates Attorney
The good news is that you do not have to go through the whole process of splitting your estate alone. Many people turn to wills, trusts, and estates lawyers for advice and assistance.
Even if you have a very modest estate, your estate planning may be more complex than you realize. A legal professional can walk you through your decisions and perhaps give you options that you had never considered. The more knowledge you have, the better you will feel about putting your final wishes onto paper.
Plainfield Wills, Trusts, and Estates Lawyers at Herold Law, P.A. Explain How to Divide Estates Between Grown Children
Could you use some advice on dividing your estate between your children from the Plainfield wills, trusts, and estates lawyers from Herold Law, P.A.? Fill out our online form or call (908) 647-1022. We can arrange a consultation with you in Warren, New Jersey. Our firm handles cases in the Warren area, including Plainfield.