Fair Doesn’t Mean Equal

When splitting assets amongst your heirs, you don't have to make the values equal for things to be fair.


The following is a transcript of the video above:

Hey, welcome to Estate Planning Live. Today I wanted to chat with you about fair does not mean equal, and equal does not mean fair. And specifically, I'm talking about during how you're setting up the distribution of your assets in your estate plan, whether that be a trust or a will, and how you're gonna divide those things amongst your loved ones, your children or grandchildren, or whoever you're leaving anything to.

And it's something that a lot of people struggle with, and if you're struggling with this, or any other issue, you could always reach out to me. You can schedule a call or an in-person chat by going to myestateplanmeeting.com. If you're not wanting to meet face-to-face or on the phone, you can also leave a comment down below, and I will answer all of those as they come in. But if it's something a little more private, please do reach out and we can talk not in such a public form.

Anyway, so what do I mean by equal is not necessarily fair, and fair does not necessarily mean equal? When people are trying to determine, you know, which of their assets they're gonna leave to what child, and which of their assets is valued in X or Y and should we split our assets in half in order to leave them to our children? It's often a very difficult thought process, and it's also a very difficult discussion with your spouse and sometimes even with children.

And there are some guidelines that I like to work from to help people in making those decisions. Number one, if we're talking about real property, my suggestion always is to consider that as something you're not going to be splitting up unless we're gonna set up some more advanced estate planning for managing that property, perhaps the vacation home that's been in the family for a long time.

But generally real property, if you leave it to more than one person, they take it as tenants at common, meaning that they have an undivided interest in the whole of the property essentially, so. If you leave it to a brother and sister, even if they do get along, who's gonna decide who gets to live there? Who's gonna decide if it gets to be sold? Under the law, they could both live there at the same time, because they both own it, and they can both enjoy it equally. But oftentimes that can create some sort of issue when it comes to how are we going to use this property that mom and dad left us and they didn't give us any instruction?

The second type of asset is our collections. I know that a lot of my clients have collections of glassware, or firearms, or other types of collections that they've put together that really kind of belong together. And you know, some clients think that they need to split that collection right down the middle if they have two children, give half and half, but just because you equal it out doesn't mean that's the right or fair way to do it for you and for your collection and for your children.

You know, maybe you have one child that's really, really into the same type of collection that you have, then you can give that collection to that child, and then make up the difference with the other child if you feel it's necessary with some other type of asset. Perhaps cash or another collection that they were into.

Boy, I really gotta do something about the lighting on these live videos.

But as we step through the process of making an estate plan, and looking at each of the different types of assets that are involved, it's important to know that you do not have to split them equally in order for your estate plan to be fair to the people that you're leaving things to.

And I work with people on these issues all of the time, and if you are putting together an estate plan, or you have already put one together, or you're just thinking about it and this is a question that you have, do feel free to reach out to me, no obligation, myestateplanmeeting.com. And you can schedule a time with me right there. Either meet in person or on the phone, and I'd be happy to answer any of those questions, or any other estate planning questions that you have.

Again, when you're creating your estate plan, you don't necessarily have to split everything right down the middle in order to make it fair for your children. You know your children better than anyone else, and you know what they would treasure and want to have. And really that's a lot of it is the treasuring of the things that are left behind. It's special to get things from mom and dad, grandma and grandpa.

So again, if you have any questions, do feel free to reach out to me. Next time something comes up I will be back on here again. Until then, take care. Bye.

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About the Author Donald Rolfe

Father, husband, entrepreneur, and owner of a trivia filled brain. I help families and individuals plan for the unexpected and end of life. Schedule a Complimentary Strategy Session to chat with me, get answers to your questions, and find out about your Estate Plan options.

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