Children who grow up in the same family may have different money management strategies when they grow up. Not only can each child’s financial personality vary from those of their siblings, but their way of relating to money might be completely different than the way that their parents handle their finances. In many families, differences in children’s financial personalities may cause a lot of heartache and headaches for parents as they work through the estate planning process with the hope of leaving their children an inheritance that will make a difference in their lives and the fear that one or more of their children will squander their inheritance and end up worse off than they were before having received it.
When parents decide to make their wills and other plans for devising their inheritance to their children, one of the first issues that often arises is whether all of the children should get a share of the inheritance. A second question often follows the first, as parents wonder whether each of their children should receive an equal share of the inheritance. Some parents choose to divide their children’s inheritance equally, while others set out unequal shares in their wills or trusts for a variety of reasons, including acknowledgment of their children’s’ efforts in caring for them as they grow old and have trouble taking care of everything for themselves.
One tool that parents can use to prevent their children from spending their inheritance quickly on things that are not of lasting value is the trust. A person can set up and fund a trust during their lifetime, or they can set up a trust during their lifetime and fund it upon their death. You can use one or more trusts to set up a situation in which each of your children receives specific portions of your estate at certain times. The plan for when and how the inheritances are to get distributed is called a distribution schedule. Any person can create any distribution plan that they could like to create, but many parents choose to give each child who is to inherit under their estate a third of their inheritance when they are twenty-five years old, half of their inheritance at age 30, and the remaining portion of the estate at age thirty-five.
Parents who do not yet have wills should know that if either or both of them pass away before making a valid will, the state laws of intestate succession will apply. The intestate succession laws give children of the deceased equal shares of the deceased’s estate. A valid will or trust takes the place of the inheritance structure set out in the laws of intestate succession and replaced that structure with whatever plan you have put in place.
Many families have situations like divorce and remarriage, complicated relationships with some or all of the children, and others that will require careful thought and planning throughout the estate planning process. It is essential that every family engage in estate planning to ensure that their wishes get carried out when they pass away, instead of the default plans provided by the laws of intestate succession. If you have questions about estate planning in Kansas, make plans for an initial consultation with Wichita attorney J. Joseph Weber by calling (316) 265-7802, or by contacting us through our website. We offer appointments Monday through Friday, from 8 a.m. to 5 p.m., and occasionally in the evenings or on weekends.