If you are wrestling with how best to distribute your estate assets among your children within your estate plan, you are definitely not alone. When it comes to estate planning, the question of whether parents should gift equally to their children often surfaces, stirring discussions on fairness, familial harmony, and practicality. Should you focus on fairness or individual circumstances? Unfortunately, there is not a “one size fits all” answer when it comes to the issue of equitable inheritance; however, the Indianapolis attorneys at Frank & Kraft offer some guidance to parents who are struggling with the question of whether to gift equally in their estate plans.
The Parent Dilemma
When contemplating estate planning decisions, parents face a multitude of considerations beyond financial distribution. They must navigate complex family dynamics, interpersonal relationships, and personal values, striving to achieve a balance between fairness and practicality. There is an enduring expectation for parents to treat their children equally, devoid of any favoritism. This expectation extends to contemplating the distribution of your estate assets when creating or updating your estate plan. While dividing assets equally among minor children is straightforward because those assets are held in a trust, complexities arise as your children reach adulthood. Despite the common inclination to distribute assets equally, various circumstances may prompt reconsideration of this approach. Ultimately, your assets are yours to distribute as you see fit; however, it may help to consider your options before moving forward.
The Pressure to Gift Equally
Equality is often hailed as a fundamental principle in matters of inheritance. Proponents of equal gifting contend that it fosters harmony among siblings, mitigating potential conflicts arising from perceived favoritism. In theory, distributing assets equally validates each child’s worth in the eyes of their parents, affirming their equal standing in the family unit. As such, gifting equally is seen as the “just” thing to do and minimizes the risk of estrangement or resentment among siblings, ultimately preserving family unity across generations. Moreover, equal gifting can promote financial responsibility and accountability among your adult children and instills a sense of fairness and equity, discouraging entitlement mentalities and fostering prudent financial management.
Why Might I Not Want to Gift Equally?
While there are certainly strong arguments in favor of gifting equally, rigid adherence to equal gifting fails to account for individual circumstances and needs. Each child may have distinct financial situations, aspirations, and responsibilities, making an equal distribution inequitable in practice. For instance, one child might require more financial assistance due to medical expenses, educational pursuits, or caregiving responsibilities, warranting a larger share of the estate. Imposing equal shares in such scenarios could exacerbate disparities and hinder the fulfillment of genuine needs. Furthermore, you might have a child who has contributed considerably more over the years than his/her siblings, warranting special consideration. As a parent, you may have clear and valid reasons for deviating from equal gifting, such as rewarding diligence, incentivizing responsible behavior, or rectifying past inequities. Finally, “fairness” does not always equate to equality. Fairness may necessitate a review of each child’s needs and circumstances and addressing them when crafting your estate plan, even if doing so does not result in strict equality.
Do You Need Help Deciding Whether to Gift Equally in Your Estate Plan?
For more information, please join us for an upcoming FREE seminar. If you need assistance deciding how to distribute your estate assets among your adult children, contact an experienced Indianapolis estate planning attorney at Frank & Kraft by calling (317) 684-1100 to schedule an appointment.
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