Recently I met with Bill, who decided to give his four children unequal distributions from his trust estate. Bill explained that he would like to give his daughter less from the estate because he had loaned her $25,000 for a down payment on a house, and it was unlikely that it would be repaid before he passed away.
Bill’s situation is very common where a parent wants to reduce one child’s share by the amount of a previous lifetime monetary gift. During our discussion, Bill told me that all of his children knew that he gave his daughter the money for the house down payment. However, since time has a way of making beneficiaries forget certain details, I suggested that Bill write a letter to his children explaining his unequal distribution. This letter can be read after he passes away along with the other estate planning documents. Another suggestion would be for Bill to gather all his children and have a family meeting explaining his thoughts and intentions.
After we pass away, we no longer have the opportunity to explain why we made the decisions we made. We might have had the best intentions when we created our estate plan, but if there are extenuating circumstances that affect one of our beneficiary’s share of the estate, it is a good idea to explain those on paper or verbally while we are still alive.
Unequal distributions can cause surprises and create problems within a family after you pass away. Keeping family peace and harmony is vitally important at the time of distributing one’s estate. Hurt feelings among beneficiaries and family drama can be minimized and often times avoided through proper communication about why one is receiving an unequal inheritance.
What the Attorneys of Morris Hall Can Do For You:
The attorneys at Morris Hall have 100’s of years of combined experience ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down. The attorneys also help those in Arizona and New Mexico to apply for and receive Medicaid assistance and Veterans Benefits. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.