Within many New Jersey families, a level of rivalry exists among siblings. This is a normal and healthy set of circumstances between brothers and sisters, and is often channeled into positive level of competition and banter between family members. When it comes to estate planning, however, sibling rivalry can take on a much more contentious form. For those who plan to leave disparate inheritances to their children, it is absolutely essential to discuss the matter far in advance.
Leaving different amounts to different children is a common estate planning choice. In some cases, one or more children will have achieved a level of financial stability that is far higher than that of their sibling(s). Parents may feel compelled to leave more money to those who have a higher level of need. For certain circumstances, it may be a good idea to pass on wealth via a carefully constructed trust, which can ensure that the money is put to good use and properly managed.
Within other families, parents may have already given a great deal of financial help to one child, while others may not have reached the same stage within their own lives. For example, many parents will help a child during the purchase of their first home, by means of a down payment or other assistance. That child’s siblings may not yet have reached a point in their lives where they are ready to buy a home, but it is understood that the same assistance will be provided when the time comes. However, if this promise is not reflected in the current estate plan, it may come to pass that no such help is available when it is needed.
When making estate planning decisions that will result in disparate levels of inheritance, many New Jersey families will find that having a frank and honest discussion of the matter is sufficient to avoid conflict between siblings. In other cases, strife may be unavoidable, but having the matter addressed before a loved one is lost can ease the grieving process for those left behind. As for how to structure such inheritance matters, an estate planning attorney can work with the family to devise a strategy that preserves assets, minimizes taxation and creates the desired end result for all parties.
Source: wealthmanagement.com, “That’s Not Fair!“, Gail E. Cohen, March 31, 2015