What kind of legacy do you want to leave? You could do a lot worse than simply raising good children, helping with their education, and getting them to adulthood prepared for life. But what about after your death? How best do you plan for those you love? Estate planning lawyers can help you define this part of your legacy. For many people, this process involves finding a way to be fair to all heirs or beneficiaries so they each receive an equitable inheritance.
While at first glance it may seem like the fairest approach is to treat all of your heirs of beneficiaries the same, I’ve always felt that it is at least worth considering the specific circumstances of each beneficiary to determine what is best for them. Treating two children, one of whom is a hard working and wealthy physician and the other of whom is a hard working school teacher of modest means the same, may not constitute treating them fairly. Further, one of them may need the inheritance sooner or, alternatively, may need asset protection due to unique risks for professional liability. Clarity Legal Group® can help you work through the process of setting goals for your estate plan. Making use of the right legal tools can ensure that you leave a strong legacy behind that is fair to all of your loved ones.
When is Leaving an Equal Inheritance Inequitable?
Leaving an equal inheritance may be inequitable in circumstances where leaving heirs an equal amount of assets would put them in an unequal position because of the circumstances that each heir starts in.
Consider, for example, a situation where you have two children. Your goal may be to divide your assets among both children so each of the kids gets half of your wealth when you pass away. However, if one child is older than the other, you may have already funded an education for the older child.
In these circumstances, if you had $500,000 to distribute among your two children and you gave each child $250,000, the child who had already had his or her education funded would be able to keep that entire inheritance to accomplish other goals such as buying a home. But, the child who had not yet gone to college could end up spending a substantial amount of the inheritance to pay for school. If that child spent $100,000 on an education, he would be left only with $150,000 to accomplish other goals after putting himself into the position his sibling was already in.
In these circumstances, leaving an equal inheritance might not be the best approach if you truly want to provide for your children equally. Of course, you may not want to leave your younger child more in case college costs were less for your younger child or in case your younger child decided not to attend school at all. If you wanted to ensure that the extra money you left could pay for college and only college, the best approach under these circumstances might involve creating a trust.
If you created a trust, you could put a designated amount of money into the trust and specify that it be used only to fund a college program. You could then divide your remaining assets equally among your children. You could specify that any funds remaining in the trust after college was paid for also be distributed equally. In these circumstances, you’ve created a truly equal inheritance for your children and been as fair as possible.
This is just one of many examples in which you may need to go beyond the basics of estate planning to provide a fair inheritance for the people that you love. You could face many different circumstances as you make plans for who will inherit assets, and many different considerations as you divide up your funds. Clarity Legal Group® can help you identify the legal tools you need to use to make your legacy what you hoped it could be.
Getting Help from Estate Planning Lawyers
Clarity Legal Group® can help you to set your estate planning goals, make decisions on what the best way to achieve those goals is, and implement a plan using the right legal tools to leave a legacy that you desire. When you want to make sure your family is fully provided for and your heirs or beneficiaries are taken care of in a way that you feel is most appropriate, you should reach out to our compassionate and knowledgeable legal team.
To find out more about how our firm can help with your legacy planning process, give us a call at 919-484-0012 or contact us online today.