For most people, the primary goal of an estate plan is to determine how estate assets will be handled after death. To accomplish that goal you must first decide to whom you wish to gift your estate assets. If you have more than one child, deciding how to divide your estate can be complicated, even heart-wrenching. The reality is that even though you may not favor one child over the others, you may have a child who is much better equipped to handle a large inheritance than the other children are. Likewise, you may have a child who is certain to squander an inheritance. So how should you handle gifting to children – what if the gifts are not equal in value? Does that make you a bad parent? Is that unfair? Ultimately, only you can answer these questions; however, you should only do so after careful contemplation.
Whether you have a small estate or a fortune to pass down you undoubtedly want the gifts you pass down to mean something and to be used in a positive way by the recipients. To ensure that this happens, you may have to ask yourself some difficult questions and face some harsh truths. If you have an adult child who has an addiction problem, for example, or who has yet to learn how to handle money it doesn’t make sense to handle that child an inheritance when you know it will disappear quickly and without anything to show for it. Understandably, you may not be comfortable completely cutting the child out of your estate plan. You may also not feel right giving more to your other children. When this is the case, consider creating a trust.
A trust allows you to gift an equal amount to all your children; however, he gift to your “problem” child will be held in trust for his or her benefit. Using the trust terms that you create you can stagger the inheritance, providing additional time for your child to mature and learn how to handle money better. If addiction is an issue, you could even include a trust term that requires the beneficiary to complete a rehabilitation program before receiving and benefits from the trust. In short, a trust allows you to effectively control the assets held in the trust long after you are gone.
If you are concerned about how best to divide your estate assets in your estate plan, consult with an experienced Illinois estate planning attorney.
- My Parent/Spouse Shows Early Signs of Dementia. Can We Still Do Medicaid Planning? - July 20, 2015
- What Happens to a Living Trust When One Spouse Dies? - July 13, 2015
- Medicaid Spousal Impoverishment Rules - July 7, 2015