Estate Planning

Treating Adult Children Differently

Every child is unique, some requiring more attention and support than others. This is true when children are young and growing up and true when they are adults with children of their own. When crafting an estate plan, it makes sense to consider treating each child differently even if this means providing financially for them in an unequal fashion.

If a child is developmentally disabled or unable to care for him or herself, making special arrangements is an easy decision. Special needs trusts have become more and more common. Most of the time, however, differences among children are more subtle, and addressing their needs in different ways in an estate plan can be difficult.

One child may be an established and financially successful professional while another is a struggling artist or social worker, or, perhaps, simply content to stay home to raise a family at the expense of a career. Clearly one child will need more help after you are gone than the other. It may also be important to consider which will make the best use of what you leave behind.

Every family has a dynamic of its own and there are no easy answers. One child may be more concerned with family history and so will treat heirlooms with more respect and appreciation. Another may be very good at financial planning and would make an excellent trustee and manager of your wealth after you’re gone, regardless of how you may distribute your assets.

It is important to give yourself permission to treat your children differently. You owe it to your family and to yourself to consider alternatives to the obvious and traditional equal split.

Remember your children as they grew up? Perhaps one was an athlete or musician who spent countless hours in practice or taking lessons. Another had medical or emotional issues that required special attention. One might have gone to public schools and another provided with a more expensive private school education. There is no reason you should stop considering this history or the special talents and needs of your children after you are gone.

It may be that you have already provided significant financial assistance to one child, such as support through college, assistance in buying a home or starting a business. Perhaps you contemplate doing so in the future but are concerned about whether this would be fair to other children. If you are concerned with treating each child equally, you can take this into account in your estate plan. If you believe a child, perhaps one that has been financially successful, will react poorly to an uneven distribution of your estate after you’re gone, you may want to consider leaving each child a baseline amount or a percentage of your estate, with an uneven split for the remainder.

Making estate planning decisions can be difficult and painful. Treating children differently, or unevenly, has the potential to cause disharmony, whether your children learn of the estate plan while you are still alive or after you are gone. How the estate plan is communicated to your children, and when, is important in avoiding future conflicts.

Confronting these often-tough choices now may actually help preserve relationships among your children after you die. Too often, siblings become estranged and distant because of real or perceived slight by a recently deceased parent, or during the administration of the estate (especially if one of your children is the successor trustee or estate administrator). If this is a serious enough concern, including your children in the estate planning process may be appropriate. In some instances, mediation or other professional assistance might even be considered.

One example of good advanced planning may be when one child values a family retreat or vacation cabin, for sentimental reasons, more than another. They might be willing to forego an equal division in order to keep the asset. For another adult child, the maintenance of a certain lifestyle or participation in a particular hobby or activity may be important in deciding how to manage and distribute your wealth after you’re gone. In an estate plan, consideration should be given to preserving and retaining certain specific properties or assets, rather than simply liquidating and selling them. If this is done, how do you determine the value of that asset, particularly when it passed down to only one of your children. In such a situation, the goal is to avoid needing to liquidate that particular asset. This can have an effect on the remaining estate and should be accounted for.

Whether yours is a relatively small or a very large estate, the special needs and interests of each child, and every other beneficiary, should be considered in creating your unique estate plan. Taking action now can provide a sense of satisfaction and emotional security, not only for you but for your children. This can be as important a legacy as the wealth you pass on.