Long Island Elder Law & Estate Planning

Long Island estate planning attorney

The distribution of your estate assets after your death is undoubtedly an integral part of your estate plan. If you have adult children, you may be facing a common dilemma when it comes to dividing your estate. There is often pressure to split your estate evenly among your children; however, you may have valid reasons to resist that pressure. A Long Island estate planning attorney at Eghrari Wealth Training Firm discusses the equal gifting dilemma and offers some suggestions for how to resolve it.

Playing Favorites

Every parent is aware of the need to not play favorites when it comes to how they treat their kids. What about when it comes to dividing your estate though? When your children are minors, deciding how to divide your estate is less complicated because you will probably create a trust to hold and protect their collective inheritances. If the trust has assets left when the children reach adulthood, those assets will likely be split equally among the children, an easy decision because there are no extenuating circumstances to consider at that point.

With adult children, however, those “extenuating circumstances” may become problematic. Although it is common to feel compelled to leave behind an equal inheritance, those circumstances may provide legitimate reasons to rethink how you distribute your estate. Moreover, the bottom line is that the assets you have accumulated over the course of your lifetime are yours to gift any way you wish to without the need for explanations.

Why Wouldn’t I Want to Divide My Estate Equally?

There are several legitimate, common sense, reasons why you might hesitate to divide your estate assets equally among your adult children. Those reasons might include:

  • Spendthrift tendencies. Most families have one – that family member who simply isn’t good with money. No matter how many conversations you have with this child about responsible financial planning and spending, he/she ends up with money problems yet again.
  • Addiction. No parent wants to admit that a child has an addiction; however, if you have an adult child with a drug, alcohol, gambling, or other addiction, it is imperative that you face that reality when making estate planning decisions. Handing an addict a large sum of money is usually akin to throwing that money in the trash.
  • A questionable son or daughter-in law. Adult children frequently marry, resulting in a son-in-law or daughter-in-law. The moment the ink is dry on the marriage certificate, your new in-law becomes a potential threat to your assets. Anything you gift to your child could be lost in a subsequent divorce or because of mismanagement by the new in-law.
  • Mental health issues. If your child suffers from a mental health issue, managing an inheritance may be asking a lot. If your child has special needs, receiving an inheritance could also jeopardize his/her eligibility for much needed state and federal assistance programs such as Medicaid and SSI.

How Can Estate Planning Resolve Your Dilemma?

Fortunately, there are estate planning tools and strategies that can help. A popular solution allows you to leave equal gifts; however, distribute those gifts using different methods. If you are concerned that a beneficiary will squander a lump sum that is gifted directly, using a trust to distribute that individual’s inheritance may be a better option.  A trust allows you to effectively retain a certain degree of control over the assets gifted even after you are gone. A Trustee, appointed by you, manages the assets, and distributes them according to terms that are also created by you.  This allows you to stagger the inheritance, or to distribute it in small amounts on a monthly or yearly basis. You can even decide what the trust assets can be used for if you are concerned about how they will be used by the beneficiary. For example, if you want the assets to be used to pay a mortgage payment or rent only, you can set up the trust to make those payments directly. You could also insist that the assets only be used for educational purposes or for medical bills. As the Settlor (creator) of the trust, you create the terms.

Contact Long Island Estate Planning Attorney

For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding estate planning, or you are ready to get started with your estate plan, contact the Long Island estate planning attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.

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About Eghrari Wealth Training Law Firm

Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill.