Planing Your Living Trust With Your Kids In Mind
Hi there my name is Bridget Mackay, I’m an estate planning attorney in Petaluma, California. Today I want to talk to you about how after it’s all said and done and your trust comes out and your kids are hearing what’s happening, you don’t want to hear them say it’s not fair. As a parent how many times have we heard this? It was probably more common when your kids were younger. But believe it or not it still comes up in adulthood as well. Dividing your estate fairly does not always mean dividing your estate equally.
When your children were young they earned privileges in the home based on their age and maturity. You wouldn’t let your nine-year-old stay up until 11 PM doing homework like you may have allowed your 17 or 18 year-old. Similar situations can come up when planning your living trust. Let me give you an example. Let’s say Joe and Susie have three adult children. They have John who runs their business with Joe which holds the bulk of their assets. They have Maureen, who is a successful real estate agent, Mark a successful CPA and the dilemma is how to divide the business assets, the one that Joe and John are running. Logically it should go to John, he has worked in the business, knows it, helped build it up but would it fair to Maureen and Mark? If they divide it equally Maureen and Mark wouldn’t have, would have interest in the day-to-day running of it with their busy careers in addition to that and this would entangle them and would cause maybe some pressure and may turn into a source of conflict between the children. One possible solution maybe to buy a life insurance policy on Joe with Maureen and Mark as the beneficiaries and then the business asset would go to John. It would increase their net worth enough, Joe’s networth enough to fund Maureen and Mark’s inheritances and ensure that all three kids are treated fairly and meets all their individual needs.
There are several other solutions that could be made in this example or other examples that you may have and when your thinking about how your gonna treat your children fairly. But in order to do that I strongly recommend that you go to a qualified estate planning attorney because he or she will have all of these suggestions and help you carry those out. Go contact those folks so you don’t hear the, “It’s not fair,” coming from your kids when you’re gone.