Unequal wealth transfers in estate plans: a recipe for disaster?

Imagine a family with two children. One of those kids has always marched to the beat of his own proverbial drummer. He has traveled the world, lived abroad for many years, can be out of contact for weeks or months on end and has only returned to his childhood home a handful of times in the past decade. He also has a very good-paying job, isn’t married and has no children.

The other child has lived in the same town as her parents most of her life. Save for a few years while she was at college and then again when she had each of her own children (the only grandchildren in the family), has had almost-daily contact with her mother. She was there to nurse her mom back to health following an illness, and she sees her parents a few times a month to catch up and visit. She and her husband are both teachers, so money is sometimes tight for their family.

The parents have long since prepared their estate plan, and had initially just dictated that all their assets be split between their two children. Now, however, given the lifestyle and income disparities between the two – and, frankly, the disparity in affection and care shown to the parents by the children – they both feel that the bulk of their assets should go to their daughter. They are concerned, however, that this unequal estate distribution could cause a rift between the children or even result in litigation after they are gone. Are their concerns unfounded, or are they realistic?

Circumstances are everything

The answer to that question, like so many others in the legal realm, is that it depends on the circumstances involved. In this situation, it is possible that, given the brother’s independence and self-imposed semi-estrangement from the family, that he might not care if he receives fewer assets. He may even see it as the “price” he has paid for living his lifestyle as he chooses.

Other scenarios might not be so clear-cut, though. It is, of course, your right to apportion your estate in whatever manner you see fit. You could choose to split things evenly. You could leave more to your older children than the younger ones (or vice versa). You could leave more to the children of your first marriage than the children of your subsequent marriage. You could leave it all to your stepchildren instead of your biological children; the possibilities are endless. You and your estate planning attorney need to be aware of the possibility that someone may feel slighted and contest the estate, however.

Trying to stave off conflict

A way to possibly avoid either legal issues or personal ones between estate beneficiaries when the bequests are unequal is to explain your reasoning. This can be done via a letter included as part of your estate plan, or in person while you are still alive. Oftentimes, helping people understand why you made the choices you did can stave off conflict. It won’t always solve everything, but honestly is usually the best policy in most situations, and estate planning is no exception.