Girlfriends Holding Flowers

Several experts said that the ways that families handle these situations depends on multiple factors, such as what caused the disparity, how strong the sibling relationships are, whether the parents have money and more.

When planning for your estate, you often look at the financial stability of your children. Who is better off financially? Do you leave more or less of an inheritance, depending on the income gap? And if you do leave different amounts to your heirs, will it look like you loved the other child more?

This may conjure up thoughts of the Prodigal Son—the child who took his inheritance and squandered it—only to return to his father’s home to humbly ask for a job as a servant. As you may recall, the father wouldn’t hear of it and threw a large party to celebrate his return. His older brother who spent all that time hard at work did not exactly welcome him back with open arms. There was no further mention of the blown inheritance by the father, and the story indicated that the Prodigal Son was treated equally and presumably received another half of his father’s estate upon his death. There were no hard feelings by the older brother thereafter. Or were there?

You can hope that your children have no hard feelings if you decide to divide your assets in a way that one child might think is unfair. A recent Forbes article, entitled When One Sibling Has A Lot More Money, discusses some of the observations that were found with siblings in different tax brackets.

The main thing missing in their relationships seems to be communication. The larger the gap, the less they talk.  Read the entire article and keep it in mind when speaking with your estate planning attorney.

Reference: Forbes (February 28, 2014) When One Sibling Has A Lot More Money

For more information on asset preservation and estate planning, please visit my estate planning website.

Mr. Amoruso concentrates his practice on Elder Law, Comprehensive Estate Planning, Asset Preservation, Estate Administration and Guardianship.