Your inclination is to treat all of your children equally when it comes to an inheritance. Truest Law knows that is not always the best choice for your family. Below are several reasons when you may want to make an unequal distribution:
· Children of unequal wealth. If you have a children of varying levels of income, you may choose to leave more to the less financially advantaged child. If you choose this option, be sure to explain your values to them or write a letter to be opened upon your death, so that they understand your reasons. Often children equate money with love, so don’t leave behind hard feelings.
· Poor money manager. If you have a child who is a poor money manager, you see them always in debt, you may not want to leave them an outright inheritance. This is the time to consider a spendthrift trust. You can protect your child’s inheritance by establishing a trust to disburse funds at predetermined ages. You can allocate funds for medical or education expenses. In these situations, it is best to name a trustee who is not a family member.
· Bad relationships. If your child has a string of bad relationships, multiple divorces or makes poor relationship choices, you should consider establishing a trust that will shield that child and the inherited funds from divorce.
· Special needs child. A properly established special needs trust will protect the child’s ability to receive governmental assistance and still provide for the child.
· Child with long-term care needs. If you have a child with a chronic illness and expensive medical treatment, you may consider purchasing an additional life insurance policy naming your trust or the child, if s/he is an adult, as beneficiary.
· Pre-existing loans. You may wish to count the loans that you’ve made to one child during your lifetime as an advance on his or her inheritance.
· Estranged children. There are times when a parent may wish to disinherit a child. If you decide to take this path, you need to be clear with your intentions. Do not just leave the child unmentioned.
If you want to learn more about establishing the right plan for your family, visit our website at Truestlaw.com or call our office today at 480 949-6500 to schedule a time to talk. We normally charge $750 for your Family Wealth Planning sessions. Because your planning is so important, we have made space for the next two people who mention this article to have a complete planning session at no charge.