Questions

Talking to Children About Wealth

When should parents start talking to their children about the parents’ money?

Sibling Rivalry

What are some common causes of sibling rivalry?

How can advisors help families avoid conflict between siblings?

Disinheriting a Child

New York law allows parents to disinherit children. Children don’t have a right to a forced share.

Equal Inheritance v. Fair Inheritance

How should parents treat their children? Treating children equally doesn’t always mean treating them fairly; treating them fairly doesn’t always mean equally.

Option 1: Equal Inheritance

When parents intend to treat their children equally, they should be careful:

  • Give children similar assets because some assets might perform better or be taxed differently.
  • Don’t forget to examine assets that the children might receive outside of a will (such a totten trust or retirement assets that have the child named as a beneficiary).

Option 2: Unequal Inheritance

Reasons parents might decide to leave a child more:

  • One child might need more because the child is in a lower-paying career.
  • The child provides care for the parent.
  • One child has children while the others don’t.
  • The child has a disability.
  • The parents gave more to one child while they were alive (for example, to pay for college or help buy a house), so the parents want to equalize past gifts. “When the parent ignores past gifts and opts for equal shares, children who received less help during the parent’s life may resent that decision, lawyers say,” writes Susan B. Garland in The Unequal Inheritance: It Can Work, or It Can ‘Destroy Relationships’, NY Times, Feb. 19, 2021.

Downsides of an unequal inheritance:

  • It can trigger fights among siblings after the parents die.
  • Children who receive less might feel like their parents loved them less.
  • Children who receive less might accuse the others of unduly influencing their parents.

“To head off sibling strife, parents should explain their decision to each child individually or as a group, or even seek mediation,” writes Garland.

Outright or in Trust?

Should you give to children outright or in trust?

It many not be prudent to make an outright gift to a child that has a mental illness or an addiction.

During Life or At Death?

Infant

EPTL 1-2.9a Infant or minor

As used in this chapter, the term “infant” or “minor” means a person who has not attained the age of eighteen years, provided, however, that such definition shall not be applicable to any provision relating to the New York Uniform Transfers to Minors Act, nor to section 13-3.4.

Issue

EPTL 1-2.10 Issue

(a) Unless a contrary intention is indicated:

(1) Issue are the descendants in any degree from a common ancestor.

(2) The terms “issue” and “descendants”, in subparagraph (1), include adopted children.

Appointing a Guardian in a Will

Trust for Minors in a Will

Step Child

Did the non-birth parent adopt the child? A step-child who was not adopted has no inheritance rights from a non-birth parent.

If there is a step child, a couple in a second marriage should not leave everything to the surviving spouse.

Disabled Child

Supplemental Needs Trust

Child with Mental Illness

Amanda Koplin, Amy Effman & Martin M. Shenkman, Planning for Beneficiaries With Mental Illness or Addiction, Wealth Management, Sept. 15, 2020 (provides discovery questions estate planners can ask clients).

After-born Child

529 Plan

529 Plan

What is the rule re bunching of 529 plan contributions?

Child Performers

A Spendthrift Child

A spendthrift child should be given an inheritance in trust, not outright.

After-Born Child

Pretermitted Child