Most parents want to treat their children fairly in their estate planning. Many people assume that means having their children inherit equally. But fair does not necessarily mean equal. There may be special circumstances to consider.
Not only do parents need to decide how much each child should receive, but also when they will receive it. The answer to that question can be different for each child, too. Inheritances can be distributed in one lump sum or in installments over time. Many parents decide to keep the money in a trust for their children. The trustee can still make periodic distributions to the child based on guidelines provided in the trust document. Best homeowners insurance. The best renters insurance.
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TurboTax review. TaxAct review. Credit Karma Tax vs TurboTax. What tax bracket am I in? Best online financial advisors. Do I need a financial planner? A child or even a grandchild may have health needs that result in increased costs. One may not need it. For instance, if a disabled child already has their basic needs taken care of through government benefits and healthcare, then it could make things harder for that child to receive money from your estate.
If you are confident that siblings will help provide for any extras this person may have in the future, you may be able to disinherit that child without affecting their quality of life. Some are better stewards. If one child has consistently made bad financial choices, and you have repeatedly bailed them out, it might make sense to leave them less because you are not confident they would use it well. Or, if you do decide to leave them a similar amount, you may want to take steps to protect their inheritance with specific rules, and someone to help manage it for them.
But not a sibling! Early inheritance. Quite often adult children have a significant financial need and parents give them substantial help. After this happens, it might be good to consider adjusting the amount that child would receive in an inheritance.
Family farm or business. One child may rely on the family farm or business for their livelihood. If one child has spent a lifetime helping you grow your farm or business, it may be best to leave them more of the total estate so their livelihood is not negatively affected.
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