Equal Division (or Equitable Division?) Among Beneficiaries

When dividing a trust or estate among beneficiaries, most of our clients want an equal distribution among their children (or nephews and nieces, or whomever). Sometimes they ask for an equal division among, say, their three children and their favorite charity. But the basic goal can usually be summed up by the concept of “equal division.” But that ignores the reality that the value of different assets can be different to the beneficiaries. In other words, retirement accounts are usually worth less to family members than they are to charities. And they are worth less to some family members than to others. Real estate, valuable personal property, even stock and bond investments, can all mean something different to the different beneficiaries. Are there tax consequences related to any of the assets they might inherit? Then the value will be different based on the level of their income taxation — and maybe by what state they live in. It can be impossible to truly make “equal” divisions. Even “equitable” divisions can be challenging, since what makes sense today may turn out to be a terrible idea two years from now. It can be really hard to figure out how to divide assets among several intended beneficiaries. We can help you think through the choices for your own situation, but recognize that you will need to revisit your plans every few years. Join us for this discussion of the issue.