Please don’t use your estate plan to send your kids the wrong message.
Let’s say you have two children. On the one hand, you have a wonderful daughter who is a very successful investment banker, and makes a very good living. You and she both know that she does not need one dime of your inheritance. In fact, she has triple your net worth, despite the fact that she is 30 years your junior. And…. you have a son. Your son…. where do we begin. Let’s just say that your son hasn’t really found himself yet. In fact, his only skill seems to be knowing how to bounce from job to job, and still somehow manage to keep a roof over his head.
O.k., now fast forward and you are sitting in front of your estate planning attorney. Your attorney is asking you how you want to leave your estate. At first, you think “equal.” After all despite everything, you love your kids equally. But, then you start thinking. You think, “My daughter does not need my money, and my son is sure going to need it.” So, being a protective parent, you tell your attorney to leave your inheritance 25% to your daughter, and 75% to your son. Of course, you would not want to entirely exclude your daughter from your estate plan, but a 25/75 split seems fair to you. You tell your attorney to put it in writing, and you walk out the door thinking that you made a very wise decision for your kids. You come from the old school and don’t discuss your estate plan with your kids, and your document is silent as to the reason for the disparity between the inheritances.
So, let me tell you what is very likely to happen when you are deceased, and the time comes for the “reading of the will.” Because you never discussed your decision with your kids, you have opened the door for some very serious hurt and pain that could destroy your daughter, her memories/relationship of you, and her relationship with her brother.
Please remember this, an inheritance is as much an emotional validation for your children as it is a financial event for them. Forget about who needs the money, the fact that you favored your son over your daughter when it came to your inheritance is something that will never be forgotten between your kids, and may never be forgiven by your daughter. It could be the reason why your daughter begins a new relationship with her therapist, and ends her relationship with her brother.
If you are going to make unequal divisions, gifts, or distributions among your children in your estate planning documents, then consider discussing the reasons for this inequality with your kids. Otherwise, you could be leaving a family behind who will only know too well that, inheritance is poison.