Even though most parents want to make their children feel like there are no favorites, most would acknowledge that different children have different needs at different times. Is it always “fair” to split things equally in an estate plan?

This is a particularly difficult decision when you have minor children. Almost certainly, one child will require more funds than another, either because of a variance in age or different needs. If you have 2 children, 5 and 20, and divide your assets in half, is it “fair” that the 5 year old’s inheritance will be spent largely on raising that child? So when the younger attains the age of the older at the time of death, they will actually have far less available to them?

Dividing accounts and property into equal shares may not be the best way to achieve your goals. Generally, older children benefit more from an equal distribution because you have already invested more money in their education and other costs, so those costs are behind them – while younger children would be forced to use their share of the inheritance to pay for such things.

Another option is to put your property in a “pot trust” or “common trust”. This can keep all assets together, with your Trustee being able to spend on each child what that child needs. You want to be fair to them in life—and in death and this can be a great way of achieving maximum fairness. At a certain point, perhaps when all are adults and through college, the remainder can be split equally among the children if that is your desire.

These shares could be distributed outright, could be held in trust for a period of time and distributed either at certain ages, or upon completing other milestones, or at the trustee’s discretion. Which option you choose will be based on how comfortable you are with your children having access to the money and property, the value of the remaining money and property, and the potential for your children to spend the money and property wisely (or frivolously).

To learn more about common trusts and how they can protect your children, as well as other important estate planning tools, call us or fill out the form below for more information: