Dear Mr. Miller:
Introduction: I have a Living Trust that leaves everything to
my two kids. But I am not dividing it equally between them. The
daughter has been very helpful to me in my golden years, helping me
out where necessary and visiting constantly. My son, has been around
but not with the same frequency. Further, my son doesn’t really need
my money that much. My daughter could use the help. What are your
thoughts on this?
Dear Loving: There is nothing wrong with leaving your assets unequally to
your children. It’s your money; you can leave it equally, unequally,
or leave it all to charity.
Problem–Lawsuits and Challenges: That’s the theory, now here’s
the reality. Although you can leave it anyway you want, you probably
don’t want to create a problem between your children where none
presently exists or exacerbate a sibling rivalry. As a judge friend
of mine mentioned to me once, “One can sue anyone, anytime, about
anything! Whether or not they can win is another story.” If you leave an unequal distribution to your two kids, will the
son be upset? Will he be upset enough to file suit on the basis of
your mental incompetence or your daughter’s undue influence over
you? Again, he may not be able to win but that does not stop him
from commencing and prosecuting the lawsuit.
Safeguards-For the Appointment with the Attorney: Leaving your
estate unequally is a significant move, so think it through very
carefully, make sure it is what you want to do and not what someone
else has told you that you should do. Further, when you see the
lawyer, don’t have your daughter sit in the meeting, don’t have her
drive you, and don’t have her make the appointment. If she does any
of these things, it just strengthens the argument that she was
exercising undue influence over you.
Safeguards-The Family Meeting: If you think your son might
actually contest, there are a couple of things you can do. But the
one thing you should not do is leave it to the attorney to explain
it to the family after you are gone. That is a plan that is fraught
with peril since you will not be there to explain your actions.
First, and foremost, you should hold a family meeting where you
can talk to both your children and tell them what you have done (or
are going to do). Note, I say tell them what you have done (or are
going to do) because you are not asking for permission, you are
simply explaining what your plan is and why, so that they
understand. You should be able to judge from this discussion and
your son’s reaction how problematic this approach may be after you
Safeguards-No Contest Clause: Second, if you think there may be
a problem, you can place in your Trust and Will a “no contest”
clause. Although cut back in its effectiveness by legislation a few
years ago, this type of clause still can pack a punch where
necessary. Essentially, this clause dictates that if a beneficiary
of the Trust contests unsuccessfully, then that beneficiary loses
what he was going to inherit.
Estate Planning Review: And last, don’t be one of those who
think that once a trust is written and signed it never needs to be
revisited again. You should review the situation every few years (I
say every 2-3, others every 5-6.) That way, if the situation changes
with your son, you can modify your plan as appropriate.
Keywords: No Contest Clause, Estate
Planning Review, Will Contest, Trust, Unequal Distribution