What Does “Equal Treatment” Mean?
Most parents will say that they love their children equally. But when it comes to preparing an estate plan, does that mean the children should be treated in exactly the same manner?
In some cases, the answer is “yes”. Parents that have only stocks and bonds or cash as assets can leave those assets equally amongst their children. The children can invest and spend those types of assets without the involvement of the other children. Each child is happy – he or she received an amount equal to his or her siblings, and can continue their lives without the interference of others. But parents who have more complex holdings – such as business assets or different rental properties, along with stocks, bonds and cash, may have reasons to treat their children differently.
For example, if one child is involved in the family business but the others are not, does it make sense for all the children to own equal shares in the business? Or if the children are friendly but couldn’t work together well in managing apartment buildings, does it make sense for parents to leave them equal shares of each property? Perhaps not.
Also, does each child have the same needs as the other? If one child is incredibly successful financially, but the other is not, should parents favor the child who needs funds over the one who does not? Will the successful child feel penalized for his or her success? Will that impact the relationship between children after the parents die?
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