02 Feb What If “Even Steven” Is Not What I Want For My Estate Plan?
Joy EckelkampSenior Counsel
It is customary for parents to want to provide equally for their children when putting together an estate plan. However, there may be circumstances where a parent may want to stray from what is common and leave children unequal shares of their estate. What planning is important if you want to provide more (or less) for one child in your estate plan?
An equal division of your estate may not actually be entirely equitable, especially when some children have been favored financially in the past over others, or some are not as financially successful. If there is a family business and one child is involved in running the family business, the parent may want to plan for succession of the business to that child. Or perhaps one child is financially more stable than another child. Perhaps one child serves the role of caregiver, and the parent wants to reward the child for the extra care and attention.
There may also be other circumstances, such as a special needs child or a child with a disability. Or perhaps the parent has already provided more for one child during their lifetime and wants to even up the disparity through their estate plan. Failure to acknowledge lifetime assistance to a child or grandchildren in an estate plan can also be a source of conflict amongst children. For example, if one child consistently received more financial assistance during the parents’ lifetime, their siblings might expect to receive a greater portion of the estate after death.
Unequal inheritances can trigger sibling fighting after a parent dies. So, keeping this in mind, what steps should you take to prevent an unequal inheritance from resulting in sibling discord? Regardless of the reason for leaving children unequal shares, communication is the key. While there is no requirement that you tell your children about an unequal division of your estate, it is recommended that parents explain the reasoning for the disparity before their death. Explaining the decision behind the unequal division of the estate may result in less hurt and resentment against the sibling receiving a larger share. If such a conversation is too difficult to face on your own, you could consider bringing in a professional to facilitate the discussion. Often your estate planning attorney is willing to facilitate such a discussion, or you can consider a mediator.
Division of the estate in blended families is especially problematic. Careful thought and meticulous consideration should be taken when planning. Explanation is critical especially when leaving a larger share of the estate to a stepchild.
Careful thought and planning can be preempted by discord among disgruntled family members with expectations of an equal division of your estate. Although, be aware that, just because you arranged for an unequal division of your estate in your will, your wishes cannot prevent it from being contested by a resentful recipient. It is not uncommon for a child to contest a will after the passing of a parent if they believe there were malevolent circumstances resulting in the perceived disparity. A Texas will contest typically challenges the facts surrounding the execution of the will or the lack of capacity of the testator. However, the validity of a will can also be contested if there are circumstances and facts to support undue influence or misrepresentation. Undue influence means that one of your other children believes (or at least thinks it can be proved in court) that you were manipulated during the process of creating your will. To prove undue influence in Texas the complainant must prove the existence and exertion of an influence, the effective operation of that influence to subvert or overpower the testator’s mind at the time of the execution of the will, and that the testator would not have executed such a will without such influence. Fraudulent misrepresentation occurs when a false statement is knowingly made about an important fact, with the intent that the representation will cause another to act upon it. If it could be argued that a misrepresentation was relied upon and resulted in a will with an unequal division of the estate, that will could be contested. Caution should be taken to document the circumstances relating to the unequal inheritance to ensure that the will cannot later be challenged.
Here are a few best practices to ensure that your carefully considered estate plan is not jeopardized:
– Use an attorney proficient in estate planning to draft your will or trust. An experienced attorney will ensure that the documents and the execution are prepared and performed according to state law. Using an experienced attorney will greatly reduce the likelihood that a document can be successfully challenged.
– Do not include any of your children in the process to avoid accusations of undue influence.
– Explain in detail the reasoning behind the inequality and make it clear that your decision is yours and not that of the child receiving the larger inheritance.
– Discuss your estate plan with your children in advance of your death to avoid surprises and explain your reasoning.
– Further, an experienced attorney will include an in terrorem clause, commonly referred to as no contest clause in the will. No contest clauses are to dissuade beneficiaries under a will from filing frivolous actions challenging the will. Essentially, the beneficiary would face the possibility of losing their entire inheritance under the will if they were to challenge the will in a way that triggers the in terrorem clause.
You have the right to do whatever you choose with your estate, including the right to unequally divide up your estate. With careful planning and good communication, you should be able to avoid any conflict or discord among your children should you decide to unequally divide your estate between your children. If you have any questions about unequal division of your estate or estate planning in general, the estate planning attorneys at Rapp and Krock, PC, are available to assist you.
ABOUT THE AUTHOR: Joy M. Eckelkamp is Senior Counsel at Rapp and Krock, PC. Joy Eckelkamp is a Certified Elder Law Attorney with significant experience in estate planning.
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