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Inheritance disparity can cause legal problems later on, P.1

A recent Wall Street Journal article took a look at the problem of unequal inheritance, and the risks it presents in regard to later legal challenges.

The basic upshot of the piece was that it is not always possible or desirable to give an equal inheritance to your children. There are a number of reasons this is the case, but what is important is that you take steps to ensure that your will is self explanatory and insulated-as much as possible-from legal challenges.

Estate planning attorneys recommend that individuals giving unequal inheritances to their children take care to prove that they have capacity to make the determinations indicated in their estate planning. One way to do this is to write extra letters of instruction which detail the wishes you laid out in your will. It isn’t a bad idea either to make a video or write a letter indicating that you have freely made your decisions and providing explanations for why you have made the decisions you have. These materials could be attached as an addendum to your will.

One could also add such explanations to the will itself. One very good technique is to add statements to your will explaining the reasons for any disparity in inheritance. This is a particularly good idea where the reasoning for the disparity is based on financial needs rather than the parent-child relationship or behavior, since children are prone to interpreting the amount inheritance given by a parent as the amount of love they had for the child.

In our next post, we’ll look at other approaches to inheritance for parents looking at unequal distribution between their children.

Source: Wall Street Journal, “Wills: How to Give One Child Less,” Rachel Emma Silvernman, Sep 10, 2001.