One of the main reasons people create estate plans is to distribute inheritances fairly between their family members and loved ones. But how do you do this? Today we are going to take a look at some basic ideas you should think about when trying to determine how best to distribute inheritances fairly through your estate plan.
How do I Distribute Inheritances Fairly? Money
When it comes to distributing property as inheritances, the question of how much money to give people is often one of the most important. For people who want to distribute money fairly, you will have to determine for yourself what fair means to you.
For example, let’s say you have four children. Do you want to give each child in equal inheritance? Do you want an older child to receive less money than a younger child, or vice versa? You want to give grandchildren equal inheritances, or provide them with some other gifts, such as paying for their college tuitions regardless of where they might be accepted?
Once you have determined for yourself what fair means to you, you’ll then need to create an estate plan that recognizes your decisions. This should mean, for example, both including specific terms in your will or revocable living trust, as well as taking account of any assets that allow you to name beneficiaries, or assets that might otherwise pass outside probate.
How do I Distribute Inheritances Fairly? Personal Property
While distributing estate funds is often easy to do in a fair manner, the question becomes much more complicated when you turn your attention to personal property. All the personal items you leave behind after you die, such as family heirlooms, collectibles, photographs, clothing, furniture, and everything else like it can often be difficult to distribute in a fair manner.
While there are many ways to tackle this problem, the best way is to come up with some system that allows your loved ones to choose or distribute such property in a fair manner. In other words, you don’t have to choose which piece of property goes to which family member, but rather, allow them to choose on their own by leaving a system they can follow.
For example, you can allow family members to choose the items they want one at a time in a specific order, or allow each of them to identify the specific items they would like.
Another option to distribute this kind of property is to simply liquidate it through an estate sale or estate auction. This is easy to do if no one is interested in any specific piece of property, and would prefer to receive a cash inheritance.
You can also leave the decision up to your executor, who can decide on a method of distribution on his or her own, or discuss the options with your loved ones. Executors can also serve as a tiebreaker or judge in determining the outcome of any disputes that might arise.