Wills and trusts lawyers in Northwest Iowa see just about every circumstance that can result from a parent’s death. Some siblings handle the will or trust administration gracefully and with dignity while others turn to squabbling and pettiness. When we work with our clients, they are often very concerned about how to treat their children equally when setting up their wills and trusts.
Treating Children Fairly
In determining what should be left to whom, parents often have a hard time deciding what is appropriate. For example, should you leave each child exactly the same amount of money in order to be fair? What if you leave a house to one and cash to the other, but the house goes up or down in value?
When determining how to split your assets in your will or trust here in Northwest Iowa, it’s a good idea to think back on your parenting experience. Since they were small children, you have probably explained to your kids how you love them all equally but in different ways. As they’ve grown, each has demonstrated a different personality, with varying strengths and weaknesses. As a parent, it may be more important for you to pay attention to these things than to worrying about making sure everything is exactly equal.
For example, one of your children may show exceptional responsibility when it comes to money. He or she lives debt-free and has a strong work ethic. In some cases, a parent may feel this child doesn’t “need” the money or property left behind as much as a sibling who is struggling. In other cases, the parent may feel this child “deserves” to receive more than the one who has racked up debt or has a spouse who will mismanage the funds.
In addition to choosing “how much,” the method of distribution may also be a way that you can create a more equitable situation. Wills and trusts allow you the ability to set up different distribution methods based on what makes the most sense for each of your heirs.
One child may benefit from a single lump sum which he or she can invest or use in some other manner. Another sibling, however, might be likely to squander a sum due to irresponsibility, addictions, etc., so the parent might prefer to have trusts set up to pay out a monthly stipend instead.
Naming The Executor
Another area where things might differ in treating your children fairly is in naming the executor of your estate. It’s very common for a parent to name a child in this role, but some thought must go into which child to choose. Again, each child’s strengths and weaknesses need to be taken into consideration.
When naming an Executor, ask yourself questions like:
- Who is most likely to act in everyone’s best interest?
- Who has the ability to stand up to the others to make sure your wishes are carried out?
- Who has shown himself or herself to have good financial sense and follow-through?
For more information on choosing your Executor, check out our Client’s Guide to Choosing an Executor.
As parents, making sure you treat children fairly when setting up a will or trust is very important. You want to minimize or even eliminate squabbling between them because, at the end of the day, you still want to take care of them. You never stop being their parent. The points I listed above are great starting points to making sure you treat your children fairly when setting up an estate plan.