Estate Planning in California: Unequal Inheritances

For some who are creating an estate plan, a fair distribution may not be an equal distribution. Reasons for this may vary. Perhaps one child is already wealthy while another is needy, perhaps someone in the family is involved in the family business, perhaps certain assets might be more meaningful to one than another. This article will summarize some of the considerations to take into account when creating an estate plan with unequal inheritances, with ideas sourced from

Talking to your beneficiaries while you are still alive is key. 

Communication is highly advisable when you have an estate plan with unequal distributions. 

  • Explaining the reasons why you have decided to distribute your estate unequally will go a long way in helping your beneficiaries accept your decisions. 
  • Communication now is more likely to promote family harmony after you are gone.
  • The relationship between risk and reward is a common balancing act in life, so if you explain your assessment of the risks and rewards of each asset to the beneficiaries, it will help then understand the fair approach behind your unequal gift distribution. 

Addressing differences in need. 

There are many strategies for addressing differences in need, and this section will highlight a few approaches. 

  • You may consider involving your beneficiaries in a discussion before you make your decisions on estate planning to get their input as to what they believe is fair. 
  • You may want to pull the wealthy child aside and let him or her know that you will be giving them unequal inheritances, but you hope that they will choose to share it with the more needy siblings. 
  • If you plan on donating to a charity, you may want to prepare your children with a good explanation of why you believe the charity is in more need of the assets than they are. 

Remember that estate plans are not a cure all. 

An estate plan is about wealth transfer, and that is all it can accomplish. 

  • Don’t expect your beneficiaries to change their natures. If you know someone is selfish or hostile or if there is bad blood between family members, you shouldn’t expect that to change just because you are gone. Plan ahead with the personalities you know in mind. 
  • Consider wealth education. If you have substantial assets, you may want to think about what type of wealth education you can provide to your beneficiaries to allow them to effectively utilize the wealth when you are gone. Many estate planning professional will be happy to include your children in discussions about the pros and cons of different estate planning tools, such as trusts, to help them understand and be involved in what will eventually be their future.

Contact an Experienced Estate Planning Attorney

Estate planning involves many important decisions and involving your family members will likely ensure a smoother transition when you are gone. Here are the Law Office of David Knecht, we have extensive experience with estate planning and would be happy to educate or involve your beneficiaries as you see fit. We can help you feel confident, understood and supported as you plan for the future. Contact us at 707-451-4502.