Estate planning is a crucial step in preparing for the future, ensuring your assets are distributed according to your wishes. However, it is not just about finances; non-financial aspects play a significant role, especially in Florida, where diverse family structures and emotional ties can complicate matters.
The way that people divide their estates or the fate of items with emotional value like family heirlooms and keepsakes can all lead to conflict after someone passes away. These challenges show that estate planning is as much about preserving family harmony as it is about asset distribution.
Dividing your estate: Equity or equality?
A report by Cerulli anticipates that $124 trillion will pass to heirs or charities between now and 2048. However, it is important for anyone who may be part of this number to carefully consider how they will handle the possessions they leave to their loved ones.
Equality in estate distribution means giving each heir the same amount or value. It is straightforward and can minimize disputes as it treats everyone equally, regardless of their circumstances. Equity, on the other hand, considers the individual circumstances of each heir.
A fair arrangement for your family can involve many different considerations, including:
- Financial needs: Assess the financial situations of your heirs. Consider factors such as debt, income, and future earning potential. Equity might be the approach if some heirs are in greater need than others.
- Contributions to family wealth: Consider the contributions each heir has made towards building or maintaining the family’s wealth. If one child has been actively involved in a family business, leaving a greater share of that business may be a fair solution even if it is not strictly equal.
- Personal values and relationships: Reflect on family values and relationships. An equal split might help keep harmony and avoid favoritism. A more equitable approach, on the other hand, may be important for families where one child values specific assets like heirlooms but another does not.
- Legal and tax implications: Consult with legal and financial advisors to understand the tax implications and legal requirements of your estate distribution. This can influence whether equity or equality is more practical.
- Future needs: Consider future needs such as education, health care and other long-term considerations. Equity may be more suitable if you foresee significant disparities in future needs.
Being open about your choices and why you made them can limit conflict after you pass away. Talking with your family can make your intentions clear and prevent misunderstandings while you make wills, trusts and other planning documents.
How The Kaplan Firm can help
The Kaplan Firm offers guidance not only in financial planning but also in addressing the personal aspects of estate planning. Attorney Mary Kaplan has firsthand experience with the challenges of care decisions and estate planning for blended families. She and the other members of our team can offer support and help you address complex family dynamics.
This legal support can help you create an estate plan that aligns with both your financial goals and emotional needs. Let us help you make a plan that respects your legacy and keeps family peace.