Fairly Equal or Equally Fair?
This is the title of an interesting article I read in Perspective (Fall 2007 issue) that reviews some steps and considerations that may help strike the right balance for your family when estate planning, which I have touched upon below.
- Talk about the future – ask your children how they see your estate being distributed, correct imperceptions and incorporate others, let them know you do not want a dispute over your estate, and be realistic.
- Deal with differences – if your children have achieved different levels of monetary success, consider the following questions:
- Have the opportunities been equal? Take this into account to avoid future resentments.
- Are current circumstances beyond a beneficiary’s control? If an heir has a medical or physical infirmity you may wish to balance the amount gifted with other benefits they receive. Think about creating a trust for a vulnerable person suffering from substance abuse or other addiction to ensure ongoing financial structure.
- Are lifestyle choices a factor? If you oppose a lifestyle choice, rather than exclude that person consider stipulations on the gift that could allow it to be used for purposes consistent with your family values.
- What about your family business? If your goal is to maintain the family business and family harmony, one solution is to issue different classes of shares so there is equal ownership and those working in the business retain control.
- Your Way – it is important that your family understand your thinking in order to avoid misunderstandings and potential litigation, which you can convey to them via a family meeting or a family letter with follow up discussion.
Have a good day,
Natalia
