Most parents want to treat their children fairly in giving lifetime gifts or a share of the parents’ estate. Many children believe that they are “entitled” to equal lifetime gifts and equal shares of their parent’s estates. However in this day and age, a parents’ assets are not their children’s birthright. Parents work hard over their lifetimes to accumulate their property. Parents should be able to give what they have, to whom they want, when they want, the way they want. Although many parents do leave their estate in equal shares to their children after they are gone, many do not. Some parents take lifetime gifts into consideration when dividing up their estate after they are gone. In most states, including Michigan, only when a parent dies without a will are children entitled to equal shares of their parents’ estate.
It is virtually impossible for parents to treat their children “equally” during the parents’ lifetimes. Every child is different and has different likes and needs. Parents can not keep track of the time and money they spend over the years on each child, from Christmases, birthdays, and other family life events to clothing/school shopping, school/after school activities and college. There are some situations where a parent may not want to give children additional monetary gifts – for their own good. Such situations include poor money management skills, addictions, marriage to a predator, poor life choices, etc. Conversely, children who go above and beyond in service to the parents’ needs, may incline the parents to give/leave extra gifts.
Some children “demand” their fair share from their parents. These demands pressure many parents to give in because the parents do not want to create a rift in the family. In most of the cases I have seen, there is already a rift in the family when there are demanding children. Making additional gifts to them will not change anything. The demanding children believe, even before there is a lifetime gift or an estate settlement, that they have been short changed during there entire lives. They can tell you what each of their siblings has received that they did not and when. They almost always forget what they have received that their siblings did not. In many instances, the demanding children have actually been favored due to their overbearing nature. Furthermore, they often have been less attentive to the parents because of their self centered view of reality and the belief that they have not received what is owed to them. When the time comes to care for aging parents, these children usually not only are the ones to tell their siblings what to do, but are also the ones unwilling pitch in and help.
Parents should be able to do what they want with their “stuff” and should not be swayed by demanding children. Equal is not necessarily fair and fair is not always equal.
By: Matthew M. Wallace CPA, JD
Published edited August 17, 2008 in The Times Herald newspaper, Port Huron, Michigan as: With lifetime gifts, equal isn’t always fair