08 Nov How to Be Fair When Dividing Your Estate Among Your Children
By: Barry E. Haimo, Esq.
November 8, 2018
How to Be Fair When Dividing Your Estate Among Your Children
The importance of an estate plan can’t be overstated. Without clear inheritance guidelines, rifts may develop among your descendants as they fight over the assets you leave behind. One way to prevent this is dividing your estate fairly among your children.
Most parents go for an equal split of their estate amongst their children. There are various ways that this can be accomplished.
To demonstrate the different ways in which an estate can be split, consider the following example.
Bob is writing a will and wishes to divide it fairly among his three children: Gene, Tina, and Louis.
- Gene has two children; Linda and Gayle
- Tina has one child; Ted
- Louis has three children; Jimmy, Zick, and Tammy
Under this distribution system, if Bob is survived by his 3 children, each one of the three gets 1/3 of Bob’s estate. However, if one of Bob’s children (e.g., Gene) predeceases him, the remaining to children (Louis and Tina) will each get 1/3 of Bob’s estate, and Gene’s 1/3 will be divided between his children (Linda and Gayle).
Bob may alternatively dictate in his will that his estate is to be disposed Per Capita.
Under this distribution system, if Bob is survived by his children, each of the three (Gene, Tina, and Louis) get a 1/3 of his estate. However, if Bob is predeceased by any one of his children (e.g., Gene) the remaining children share Bob’s estate equally (i.e., Tina and Louis each get ½), and none of Bob’s grandchildren will be entitled to his estate.
Per Capita with Representation
The third option that Bob may choose for his will is Per Capita with representation (aka Per Capita by generation).
This succession system states that if Bob is survived by his children, each of the 3 children gets a 1/3 of his estate. If one of Bob’s children (e.g., Gene) predeceases him, the remaining children (Tina and Louis) each get a 1/3 of Bob’s estate, and Gene’s 1/3 will be divided equally between his children (Linda and Gayle). If Bob is predeceased by all his children, then his estate would be distributed equally among all of his grandchildren (Linda, Gayle, Ted, Jimmy, Zick, and Tammy), which would mean 1/6 each.
Estate Planning Determines the Kind of Legacy You Leave Behind
Family infighting shouldn’t be what you leave behind. Your legacy should be one that brings peace and prosperity to your descendants. This can only happen if your estate plan is clear and transparent to all relevant stakeholders.
Many estates have non-cash assets that also must be taken into consideration. An experienced estate planning attorney can provide guidance on the best way to divide those assets fairly.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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