The Mistake of Treating Unequal Things Equally in Your Estate Plan
Estate planning is a lifetime process whereby:
You control my property while you are alive and well;
You take care of yourself and your loved ones if you become disabled;
You give what you want to whom you want, when you want and the way you want; and
You do so with the lowest possible amount of taxes, professional fees, and court costs.
In making the decision about when and how to provide an inheritance to a child or other beneficiary, there is a tendency to want to treat everyone the same. While the motivation is laudable, it may be misguided. Whether by circumstance and choice, two people are rarely in identical situations. While some beneficiaries may be able to receive their inheritance all at once without concern. Others may have issues with substance abuse or an abusive marriage. While one child may be great with money, another child may be a spendthrift.
Legendary UCLA basketball coach John Wooden is purported to have said: “Fairness is giving all people the treatment they earn and deserve. It doesn’t mean treating everyone alike.” The same line of reasoning can be applied to determining how to make distributions to any given beneficiary. As you are considering when and how you want to give to a person consider the following questions:
1. Does the potential beneficiary have any addictions that could impact or be impacted by a large sum of money?
2. Does the potential beneficiary have marital issues that could impact or be impacted by a large sum of money?
3. Does the potential beneficiary have financial concerns that could impact or be impacted by a large sum of money?
4. Does the potential beneficiary struggle to wisely managing money?
5. Is there any other reason why the potential beneficiary might be benefited by more careful oversight of the inheritance.
By letting go of our tendency to want to treat everyone “equal” we can move to a higher level of planning that accounts for an individuals unique circumstances. This higher level of planning will protect both the beneficiary and your hard-earned wealth.
This post is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Nothing herein creates an attorney-client relationship between Hallock & Hallock and the reader.