You have worked hard over your entire lifetime to accumulate what you have. 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 or shares of your estate after you are gone. Your children may even start thinking that your property is theirs, even before you are gone.
Luckily, in this day and age, your assets are not your children’s birthright. You may want to leave your estate in equal shares to your children after you are gone, but you don’t have to. In most states, including Michigan, only if you die without a will could your children be entitled to equal shares of your estate.
You can disinherit the child who has disowned you or is in prison. Or you can disinherit all of the kids and leave it all to charity. You can do whatever you want.
Unless you have kept a ledger of every expenditure for every child beginning when he or she is born, it is virtually impossible for you to truly treat your children “equally”. You can not realistically keep track of all of the time and money you have spent over the years on each child. Every child is different and has different needs. However, you can be “fair”. But what is fair?
Have you made larger gifts to some of the children during your lifetime that you did not make to others? You may have kept track of these gifts, such as helping one child with the down payment on a house or bailing another out of a financial crisis. By keeping track of these lifetime gifts, you may want to take them into consideration when dividing up your estate after you are gone.
There are some situations in which you may not want to give a child any 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.
Often in families, especially larger families, there is a helpful child and a demanding child. The helpful child is always there for you and the rest of the family, willing to put his or her life on hold, to be there for a family crisis. Do you want to reward this child for devotion to the family? If so, the fair thing to do would to leave the helpful child a larger share of your estate.
On the other hand, the demanding child seems to be regularly asking for his or her fair share of your estate, while you are still alive. These demands are often times in the form of bailouts resulting from lack of proper planning or poor spending habits. Does one child always seem to end up with your car or appliances when you get new ones?
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. It may make matters worse by increasing the animosity between the children receiving these gifts and the children who have not received these gifts.
These demanding children often 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 his or her continued requests and demands. Furthermore, the demanding children often have been less attentive to the parents because of a self-centered view of reality and the belief by such children that they have not received what is owed to them.
When the time comes to care for aging parents, demanding children usually are the first ones to tell their siblings what to do, but are also the last ones willing pitch in and help. Demanding children typically help out only when it is convenient or beneficial to themselves.
Do you have a child who has moved in with you because of a divorce or a lost job, but won’t leave. This type of demanding child often does not do his or her fair share of household chores or contribute a fair share toward household expenses. The child may even expect you to do your parental chores you did when the kids were younger, such as cooking or laundry.
How do you get them out? You could evict them, but that can create loads of family friction. Or you could just sell the big house and then either move into an apartment or buy a small one bedroom condominium where there is no room for the child and his or her family. I have known of cases where this has worked successfully.
You can level the playing field with your estate plan. You could leave these demanding children a smaller portion of your estate after you are gone if you believe that would be the fair thing to do.
Its your property. You should be able to do what you want with your “stuff”. Don’t be swayed by demanding children. Your children are not entitled to anything of yours. Equal is not necessarily fair and fair is not always equal.
By: Matthew M. Wallace, CPA, JD
Published edited December 11, 2011 in The Times Herald newspaper, Port Huron, Michigan as: Heirs get theirs Your children aren’t entitled to equal shares of estate