Estate planning: Why ‘fair’ and ‘equal’ are not always the same
Adult children can have an emotionally charged and often juvenile reaction to their parent’s estate planning, especially following a parent’s death...
Beneficiaries frequently equate terms of the will with love or lack thereof. Receiving a perceived smaller distribution or not being chosen to be in charge could confirm an adult child’s viewpoint of, “mum always loved you more.”
One of the most difficult estate planning decisions is who will manage the estate. Many times, this question can halt the estate planning process because parents cannot decide which child to choose.
Sometimes, parents decide not to choose one child and select several adult children as successor co-trustees.
Some parents choose a family member or friend to manage the estate to avoid choosing one child over another.
This decision sometimes works well, especially if the trusted person is a financial or legal professional with trust administration experience.
But relatives and friends may have favourites, too. They may even dislike one or more beneficiaries. Some potential trustees, especially the parent’s siblings, might be deceased or too infirm to serve. (You should always pick someone you believe will outlive you.)
Institutional trustees, like banks and trust companies, can be a good alternative if a suitable family member or friend can’t be found, but they will decline to serve if it’s a small estate.
If your estate is small, have very specific or complicated instructions, or are concerned about fees, an institutional trustee is probably not a good idea.
Your estate plan should have clear instructions to administer it expeditiously and to pass on the most assets possible to beneficiaries.
The simplest and least costly trustee choice could be one of your children. It would be the fair choice to pick the one with the least need for the inheritance and is most likely to follow your instructions.
Talk with your attorney and your long-term advisors about who would be best. Formally discuss with the child you chose what you expect of them and make sure they are up to for it.
Also, discuss with your attorney how to use a trust protector to safeguard the interests of the other beneficiaries.
Unlike a trustee, the trust protector does not manage the trust estate but provides a safety valve for specific actions.
Communicate the reasons for your choice to the other children to minimise hard feelings.
Your children are more likely to consider your choices “fair” if you’ve discussed your reasons with them.
You have the right to do whatever you want with your estate assets. However, there may be unexpected consequences to your choices.
Let us here at Newlife Wills get your affairs in order for you.
We can help with all aspects of Will Writing and Estate Planning. Get in touch with us today on 01843 598620 or firstname.lastname@example.org
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We hope you found this article helpful,
Newlife Wills team.