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It's true – mom really did love your brother best. The proof is in the will.
Equal splits among siblings are still the norm in estate planning, yet a new study finds that more parents are writing wills that favor some of their children more than others. Experts say that's a recipe for discord.
The number of parents who treat their children unequally in wills more than doubled from 1995 to 2010, according to an October 2015 working paper from the National Bureau of Economic Research. By the latest numbers, almost 35 percent of parents plan to give their children unequal bequests.
Uneven splits are more common among adults born after 1960, the study found, as well as among people who are divorced or whose spouse has died.
Complex families are a big driver of the increase, said paper co-author Robert A. Pollak, a professor of economics at the Olin Business School of Washington University in St. Louis. Parents' wills may favor biological children over stepchildren, for example, or children from their current marriage over those from a previous one. "Contact seems to make a difference here," he said.
Previous studies have offered other ideas about why a parent chooses to favor one child over another in the will; notably, to give a bigger share to the least well-off child, or as payment for care and attention.
Often it's less about sentiment than practicality. It's not unusual to see imbalances when parents are planning to provide for a special-needs child, for example, or passing on a family business when the kids have varying levels of interest and involvement, said Kevin Meehan, a certified financial planner based in Itasca, Illinois.
Other times, parents want to equalize gifts they have already made, he said — such as paying for one child's education through medical school when another only pursued a bachelor's degree, or funds offered to buy a house, get married or start a business.
Regardless of parents' reasoning, unequal bequests can lead to family and legal woes, said Larry Lehmann, president of the National Association of Estate Planners and Councils. Slighted kids may challenge the will, he said, alleging you had diminished capacity to make that gift, or that the sibling with the bigger share exerted undue influence.
Siblings are at the heart of most will disputes, accounting for 44 percent of cases, according to a 2014 survey by UK law firm Seddons. Claimants cite unequal distributions in 32 percent of cases, and another 46 percent, said it was because "they did not get what they were promised" or "someone took everything that was promised to them."
"In estate planning, frankly, one of the major goals might be to keep your children out of court with each other, or out of court with your surviving spouse," said Lehmann, who is also an attorney based in New Orleans.
Even if there aren't grounds for a legal challenge, there could be familial rifts over the decision. "A lot of people would really like to have their children like each other," he said, so such decisions should be handled with care.
First things first: Draft a will. "The thing consumers should be most aware of in terms of their estate plan is, if they want a say in how things are distributed, they need to make a will," said Pollak.
Without one, state intestacy laws apply — and those generally specify equal division among biological and legally adopted children. Under those laws, "stepchildren, even if you've been living with them for a very long time, do not get anything," he said.
Don't forget to divide possessions of sentimental value, along with assets. "Sometimes it's the most mundane things that create explosions," said Lehmann. Talk to your kids about which items they might want, he said, and include in your estate plan pictures and a detailed list of who gets what.
Then, communicate your reasoning behind bequests (equal or not) to your kids — at the very least in a letter with the will, but preferably in person while you're still alive. "We strongly advise you let your children know what you've decided so they don't blame each other for your decisions when you're gone," said Meehan.
It's worth noting that even when a split is equal, siblings may not deem it fair, said Lehmann. A child may believe he or she is entitled to a bigger share for the same reasons a parent might have otherwise opted for an unequal split — time spent as a caregiver, for example, or unequal money gifts.
Lehmann suggests holding a family meeting at your estate planner's office so that the kids can ask questions. The public setting can also limit claims after you have died of undue influence or diminished capacity, he said.
Review your estate plan periodically, and update it as needed to reflect changing circumstances. Make sure the kids are aware both that there's a new will and what changes it entails, to ensure the correct version is used after you've died.
"None of us gets out of here alive, so it's the responsible thing to do," said Lehmann.