Should Parents Split an Inheritance Equally? Not Always

Should parents split an inheritance equally? Not always. There are many reasons why you might not want to treat all children equally. Read more: Sign up for my Love, Money + Real Estate newsletter.

Should parents split an inheritance equally?

One of our readers sent in this question:

Q: My mom is in her 90s, still lives independently and is going to leave a sizeable estate worth several million dollars. She lives near me and I help her out with just about everything, speak to her several times a week and try to spend as much time with her as I can. My brother doesn’t do anything. I have two other siblings, one of whom has had trouble with drugs through the years and is pretty much out of the picture and one who has a seriously health issue and will need care and assistance for the rest of their life, which I’ll provide.

My mom has told me she intends to split her estate unequally: two-thirds for me and one-third for my brother. I’m struggling with this. I feel as though she should share it equally between us but I don’t know why I feel that way. He literally does nothing but cause trouble. Is there something I’m missing here? Mom seems pretty settled with this and I don’t really want to bring it up to her.

Money can divide siblings – or not

A: I can tell that you’re a loving, caring daughter and sibling. You take care of your mom. You’re going to take care of your sibling. And, you care that your brother, who just brings angst to every party, might feel hurt if mom leaves you a larger share of her estate.

At the risk of trotting out a well-worn cliché, life isn’t fair. And, inheritances don’t have to be equal.

But, you already know this. Your concern is whether you should challenge your mom’s decision in order to preserve family unity. But the way I see it, you don’t seem to want to have a deeper relationship with your brother. You just want a way to explain why your mother chose to dispose of her money this way.

Understanding what motivates parents to split an inheritance unequally

The answer lies in looking at your other siblings: One has a chronic illness and will require lifelong help and the other is estranged from the family.

The sibling who is sick will require your assistance for the rest of her life, but if she receives a chunk of cash it may bounce her out of federal or state medical or disability benefits that she receives. So your mom (in her infinite wisdom, or perhaps after a deep dive with her estate attorney) decided to give you her share of the estate, knowing that you’ll provide whatever extra assistance she needs through the years.

In this case, you can say the reason you’re getting two-thirds of the estate is that you’re the custodian of your sibling’s share. And, that’s why your brother is getting one-third instead of one-half. It’s probably the truth and it should be an easier answer for your brother to swallow.

5 reasons why parents choose to split an inheritance unequally

There are a number of reasons why parents might choose to give a larger share to one child or exclude a child altogether:

Illness. As I went through in the above answer, one child may have a chronic illness (or is the parent of a child or children who suffer from a serious illness) that will require costly care and treatment, perhaps forever. The parent may want to provide financial assistance to help their child cope with the future expense. If this is something you face, consider putting the assets into a special needs trust, so that it doesn’t cost your child or grandchild valuable medical or disability benefits.
Divorce. Divorce can be costly and have lifelong financial implications that a parent may try to counter. This is especially true if the child opts to stay in the marital residence (ostensibly for the grandchildren’s best interests) but gives up 401k or other retirement cash in order to buy out the ex-spouse’s interest.
Death. If a spouse dies, the remaining spouse may have to shoulder the burden of supporting a family while raising kids. Having a little extra cash might help.
Career path. One child may choose a career they love but it doesn’t happen to pay well. A well-off parent may try to help financially to allow their child to take money off the table.
Favoritism. Although they might deny it, some parents play favorites, and they may choose to leave a larger share of their estate to the favorite child or grandchild

Inheritances: cash, real estate, jewelry artwork, and knick-knacks

Inheritances come in many forms, including cash, bonds, stock, real estate, artwork, jewelry, cars, household furnishings, and the knick-knacks that have sentimental, but perhaps not real, value. Dividing these items can be tricky and time-consuming. Trusts can be used for assets that have value, and parents will sometimes set up different trusts for different heirs, and put title various assets directly into these trusts. When the parent dies, the beneficiary should receive exactly what the parent wanted them to have.

If parents want to divide an inheritance equally, they may put all of their assets into a single trust, and then name their children as equal beneficiaries.

But sometimes, kids fight over the things that have the least value – but are emotionally charged: a piece of clothing, photos, mementos of times gone by. Unless the parent specifically designates which child gets which piece of art or memento, or leaves instructions as to how these items are to be divided, it can easily turn into a free-for-all, with hurt feelings all around.

Talk to your kids about your estate – and their inheritance

It feels like you can talk about anything in this country, except money. Money and inheritances are still the third rail. Parents don’t like to tell their kids what they have, or what they’re leaving behind. Kids don’t like to ask. So, most people wait and worry, when a simple conversation or two could shed some valuable light on the subject.