Posted on 06/23/2010 9:24:56 AM PDT by Kaslin
Dear Carrie: I have two grown sons: one's a corporate attorney and one teaches English at a public high school. Needless to say, their incomes are quite far apart. I'm tempted to leave my less-well-off teacher more money, but is this a good idea? And if so, how's the best way to do it? -- A Reader
Dear Reader: Your excellent question raises some important issues about fairness and about how to handle estate planning -- particularly the importance of communicating with your heirs about your wishes and intentions. Even the most generous of impulses can be misinterpreted, especially those involving family and money.
EQUAL IS EASY (AND PROBABLY RIGHT)
I'll start by saying that my natural inclination is for parents to treat their children equally. I completely understand your impulse to provide extra assistance to your son with fewer resources, and that ultimately may be the best decision -- but I caution you to proceed with care.
First understand that both of your sons may easily perceive their inheritance as a symbol for your love. Your sons are adults, but it's amazing how childhood insecurities can linger. A perceived slight can trigger resentment that can last for decades.
Also, things can (and do) change. One son may be earning a lot more now, but it's impossible to accurately predict the future.
TALK CAN LEAD TO CONSENSUS
If you decide that giving more to your son the teacher is really the right thing, explain your plan to both sons now, starting with the wealthier son. Be sure to present it as an idea -- not a fait accompli.
Hopefully, he'll be receptive and understanding. Then you'll be able to discuss your plans with your other son. A third conversation with both of them should ensure that the idea is acceptable to all concerned.
Of course, if your wealthier son is unhappy, you've got some rethinking to do. One possibility is to treat the two equally in your will, but make annual gifts to your son the teacher to help him out now (or perhaps to his children, such as with contributions to a 529 college savings plan). Or you might come up with an estate plan that provides more money for the teacher, but evens things out by bequeathing some family heirlooms or other non-financial assets to your wealthier son.
I'll add here that if your wealth is substantial, now is an excellent time to talk to an estate-planning attorney to ensure you won't run into a big estate tax bill. Although estate taxes were repealed at the end of 2009, they will return in 2011. Up to $1 million is free of tax, but anything above that is taxed up to a maximum of 55 percent, depending on the size of your estate. So, plan ahead.
As for your children, I know you're trying to be fair, so think carefully before you decide to give one of them more money than the other. After all, the last thing you want to do is to foster resentment that could live on for years after you've gone. Good luck.
Have you sat down and talked with all of them together? Who else would need to be included?
He already is 'sharing' with his brother:
The rich guy is funding his own retirement, the teacher is funding his retirement with money confiscated from his rich brother through taxes.
The rich guy is funding his own health insurance, the teacher is funding his health insurance with money confiscated from his rich brother through taxes.
The rich guy is paying a far greater percentage of his earned income in taxes than his teacher brother is. The teacher brother is receiving a far greater share of tax money than the rich brother. For example: Some of those tax moneys from the rich brother go to build the teachers offices, while the rich guy has to help pay for his own offices through his own hard work.
I'll wager I could list a hundred different ways the rich guy is 'sharing' with his teacher brother, and most of them are at the point of a gun.
The annual exclusion for 2010 is $13,000 per recipient. A couple can give $13,000 FROM each person (2x 13,000) TO each person.
So, if a couple is giving to another couple they can give 4x $13,000 or $52,000 this year.
I was always Dad’s favorite & little Sister was Mom’s.
When he passed away a couple of years ago, my mother and sister looted his estate (co-executors). What I wound up with fit in a shoebox & is worth about $2 at a garage sale (and old baseball book & a NYY tie).
After being upset over it a long time, I realized IT’S JUST STUFF/money - and let it go.
I had the best Dad - 40 years of awesome memories & wouldn’t trade that for any amount of money or stuff.
Mom & Sis got it all, and are still miserable. (And it drives them nuts that I just don’t care)
You sound like you're in Congress or something.
bump for later
Good for you. Attitude and outlook is worth more than stuff.
If you don’t have a lot of money or property, what is more important are keepsakes. Some things you don’t care about may have sentimental value to one or another of the kids. And these are the things that can cause hard feelings.
You should talk to each of them separately about whatever favorite items there may be. They probably won’t want to deal with it, they’ll say they don’t want anything, but just tell them you’re working on your will and you want to make sure the keepsakes are accounted for. Ask each one about his siblings, is there anything your sister would want? This gets them to thinking about it. If both of you want it, how do you suggest I resolve it?
In some cases its better to hand those out before you die. You get the joy of seeing their reaction and you know it went to who you chose.
Tell them what you’re thinking about doing with the house, and judge their reaction.
People are funny. When it comes to wills its almost like they are looking for a reason to be hurt. So talk to them, then sort it out on paper, then talk to them again. Once you’ve got the will sorted out, show it to them so nothing in it comes as a surprise. Make sure they all know where the papers are for the house, loan papers, insurance papers, or whatever.
Money is usually easy, especially if you don’t have a lot. You just split it. Its the things that can’t be divided that are harder. If you can talk those things out before you die its better.
Another thing. I know I’m probably intruding and I don’t know you to have that right. I know you’re a believer, but if you aren’t real outward with your faith its important to talk to the kids at least once about it before you go. They need that. They may or may not be outwardly religious but its important to them to hear you talk about your faith before you check out. It will mean an awful lot to them when you go. They need to know Dad’s alright with God and even if they already know, they need to hear it again. How you go out is a lot more important than money or stuff.
Very kind. Thanks.
Ah, yes, the “do over” family—man with kids and ex-wife marries anew and has stepchildren who get the fathering, and even the grandfathering, that the blood children and grandchildren do not...
Excellent article, especially with the discussion of the difference between “fair” and “equal” as totally different concepts. The author presented good ideas that should cause deeper thinking and effective conversations in the family. That is where most resentments begin - a failure to communicate. This is especially true when a family business is involved in the equation.
Don't be such a jerk....as I said the estate was small...we don't need the money...but maybe someday his grandchild will. Now it will just be pissed away by the ner do well child. Not to mention some nice furniture pieces that were his mothers...that will now end up in a pawn shop. Its about doing the right thing. When I met my wife she had a very poor relationship with her father due to his lack of fathering (i.e. never paid a dime in child support with the promise to pay for college...guess what, I'm paying for her college now at age 41 because he didn't). I encouraged her to build back a relationship with her father over the years thinking that he had changed and turned his life around. In the end he was the same old a##hole....leaving a lot of hurt feelings.
I don't need to read any further to see that you are a bit of a drama queen.
Just as I thought...you really don’t have anything to add to the conversation on this thread...just taking pot shots.
No, I added a thought. Then you called me a jerk.
I'll cover it again with your quote:
Three other children (two of whom have given him grandchildren) were pretty much given the shaft even though they were the ones who spent time with him at holidays, etc.
You don't earn an inheritance by "giving" grand children or spending time with a loved one.
Your turn, but nicely this time...
This was an interesting article that brought out a great deal of emotion and personal stories from people who are, or have been affected by this issue. A person with terminal cancer has posted about her pending decison, another man posted that his wife has continued emotional/mental problems because she was cut out of her father’s will, etc. I posted my situation as a cautionary tale to those who would not divide an estate equally among children. And then you posted suggesting that I had children and spent time with my father-in-law during holidays as a means to get an inheritance. The giving of an inheritance is tied to love and emotion in many ways...to ignore that is to ignore reality. That is why we generally leave our estates to family members rather than a bum on the street. To be left out of a will as a child is a powerful and hurtful thing. When the intestate succession statute would give you more of your father’s estate than his will, it is a hurtful thing. The purpose of my post was to let people who haven’t experienced it know that and to encourage people drafting wills to treat their children equally.
I would trade everything that they may have at their time of death for just one more day of life.
I love my family as well....and I would trade dollars for days as well. That being said, would you be a little surprised/upset/hurt if your father left his entire estate to your ner do well cousin with a drug habit who had never visited him?
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