An inheritance is money you leave behind for specific individuals in your will. If you have children, it is likely a significant portion of your will is going to be devoted to leaving them your assets. While it is common to leave an equal share, oftentimes equal is not fair. There is a range of different factors that may contribute to your desire to leave an unequal inheritance. You must consider all of the logistics and justification behind leaving an unequal inheritance to avoid an uncomfortable situation between you and your kids.
If you are considering leaving an unequal inheritance, rest assured that you are not the only one. In fact, leaving unequal inheritances has become increasingly common, with a rate of 35% as of 2010. While it is not the majority, you are not alone in your decision.
There are multiple reasons you might want to leave an unequal inheritance for your children. If one of your children becomes your primary caregiver, you may feel inclined to repay them as a thank you. If you have both biological and stepchildren, particularly if they became your stepchildren later in life, that may contribute to how much you want to leave them. If you have already given one child a large sum of money, you may want to give the other a larger inheritance to even the playing field. Further, there are a variety of factors that contribute to your justification for leaving an unequal inheritance.
Below are three tips for leaving an unequal inheritance:
1) Explain Your Reasoning
As you and your estate attorney draft your will, be careful about articulating your intentions. Transparency and honesty are vital in an effort to diffuse confusion that beneficiaries may have. Be sure to include that the decision was completely yours, and not influenced by the child who is receiving more.
2) Include a No-Contest Clause
Formally known as an in terrorem clause, a no-contest clause indicates that if an heir challenges the will and loses, they will get nothing. You must leave the heir enough to disincentivize them from challenging the will, as the amount will not be worth the risk.
3) Hire a Mediator
If you are concerned about conflict arising between your children regarding your estate plan, you can hire a professional mediator for your discussion. Money is a sensitive topic, especially in this case when distributing assets unequally. To make sure the conversation does not get out of hand, hiring a mediator may be a smart move.