If you are like most parents, you want to treat your children fairly when giving lifetime gifts or a share of your estate. You have worked hard over your lifetime to accumulate your property. You should be able to give what you have, to whom you want, when you want, the way you want.
However, your children may think differently and believe that they are “entitled” to lifetime gifts from you and shares of your estate after you are gone. Luckily, in this day and age in Michigan, your assets are not your children’s birthright.
Although you may want to leave your estate in equal shares to your children after you are gone, you do not have to. You may also want to take lifetime gifts into consideration when dividing up your estate after you are gone. In most states, including Michigan, only if you die without a will are your children entitled to equal shares of your estate.
It is virtually impossible for you to truly treat your children “equally” during your lifetime. Every child is different and has different likes and needs. You can not keep track of all of the time and money you have spent over the years on each child.
Just think of all the gifts you have given at Christmases, birthdays and other family life events. You may have also spent substantial sums on clothing, school supplies and activities, sports, outside of school activities and college. Its pretty likely that you did not keep a ledger of all these expenses you paid for each child.
There are some situations where you may not want to give a child additional monetary gifts – for their own good. Such situations include poor money management skills, addictions, marriage to a predator, poor life choices, etc. On the other hand, you may want to give or leave extra gifts to a child who goes above and beyond in service to your needs or other family members’ needs.
Even though it is your money and property, you may have a child who regularly “demands” their fair share of your estate. These demands are often times in the form of bailouts resulting from lack of proper planning or poor spending habits.
These continued demands can pressure you to give in because the you 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 because of the demanding child. When you make additional gifts to them, it will rarely change anything.
These demanding children usually 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 most instances I have seen, the demanding child has actually been favored due to their continued requests and demands. Furthermore, the demanding child often has 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 least willing pitch in and help.
Its your property. You should be able to do what you want with your “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 September 27, 2009 in The Times Herald newspaper, Port Huron, Michigan as: Equal isn’t always fair when splitting estate