On January 14, 2014

Most of the time, Colorado parents go to great lengths to make sure they provide equally for all heirs without playing favorites. However, in some estate planning situations, parents purposely play favorites. They may do this for business reasons, perhaps because one of their children has helped them make their family business successful, and they are interested in perpetuating it.

In other situations, parents may want to reward a child who has cared for them or punish another one that has caused problems. Instead of completely cutting out an irresponsible child, though, inheritances are sometimes locked up in a trust with conditions that must be satisfied in order to receive a distribution.

Advisors warn parents that if they decide to favor one child over another in the estate planning process, the other children will most likely not respond favorably even when valid reasons are given. Giving more to one child than another is often interpreted as unequal love. Regardless of why the distribution in being done in an unequal manner, there may be one child who feels like they got the short end of the stick. Experts advise against leaving one child nothing, though, because that child will most likely contest the will.

When deciding how to divide an estate, whether the division is fair or not is strictly up to the parents. However, if the parents decide to divide the assets in an unequal fashion, they should be prepared for the reactions they will most likely get from their other children. Even though the children may not like it, it is probably best for the parents to let them know of their intentions in advance so there is time to make adjustments if necessary.

Source: Private Wealth, “Playing Favorites“, Caren Chesler, January 07, 2014

Categories: Estate Planning

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