Today's world, more than ever, is embroiled in a fight for equality for all. Race, sex, and nationality- nothing is out of the running when the fight for equality is concerned. Regardless of our eventual feelings as adults, we are raised (hopefully) to be non judgmental, fair and honest, and to treat all with kindness and a sense of respect and to pass these values to our children. In the estate planning business, my job is to assist people with their family's plan: plan for family expansion, plan for college, plan for acquisitions, plan for retirement... and the eventual plan- "the great estate plan." I call it this because it pretty much is the final plan (although always subject to alterations) and the decisions as to who will get the hard earned fortune you spent your life amassing. Believe it or not, it is here will you will be judged and remembered, and although you will be gone, you certainly will not be forgotten- but for what?
While you rarely read that I clearly state my personal opinion, I will on this subject: unless there are extenuating circumstances, I don't believe that favoring one child over the others is a very good way to structure your estate. Once you are gone, I would think that you would want to see your kids grow old together, stay close and in communication. But yet I see more than I would like to when parents favor one child over another, setting up the future for a fractured family, of which siblings will probably never talk to each other again, cousins will never to learn the pleasure of having cousins, and irreparable damage occurs when one child learns that he or she was not as important to be remembered equally by their parents. It's ugly, it's a tragedy, and can be either explained or managed with an assortment of strategies. If you have a child who is more successful than the other(s), never assume they "don't need the money." Even though they are your children, you’re not their bookkeeper or accountant. You don’t know what goes on in their household, and you should never assume you know. Regardless of their perceived success, why punish them for working hard and making a success of themselves? How would you feel if you won the lottery only to learn that the lottery officials decided that "you didn't need it" and passed it along to the next in line? Now take that one further: picture the one who decided was your parents…who gave them the right to punish you for being successful? Did they take into account the thousands of hours you worked and the chances you took, vs. the "less successful" child who worked as little as possible, or just couldn't get it all together through no fault of their own? No my friends, all children should be treated equal, and if you loved them equally, you should bequeath them equally.
Now, I understand that there are always extenuating circumstances that would deter you from dropping a sum of money into some children’s laps, regardless of age: health circumstances, addictions, in-law issues, mental impairment, and an innumerable amount of exceptions. These can be overcome by the use of trusts, trustees, co-signers, responsible oversight and many other ways. Income from a sum of funds and the ultimate beneficiary, called the remaindermen, are very different. Income can be dedicated to one person for life, with the balance going to another when the income beneficiary no longer needs it, or expires. The principal may skip a generation going to grandchildren, thus benefitting two generations after you: how cool is that! The end result? Your hard earned lifetime accumulation of wealth can be guaranteed to benefit many of your children in multiple generations instead of an imbalanced financial plan resulting in a family war after you're gone- not my idea of helping to create and maintain family harmony after you're gone. Is this what you really want to accomplish amongst your kids and beneficiaries?
Every person I work with, every family I work with is different with their own set of issues, problems and idiosyncrasies. The one commonality though, is a love of children by their parents, and usually a quest for family harmony and love. Do yourself and your kids a favor: treat them all equally, so you will be remembered for the loving parent you are, not for the one who played favorites and after you're gone, left them to fight amongst themselves... not the way I would want to be remembered...