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Inheritances not always created equally

In making an estate plan, the topic of inheritances comes up. But how should Floridians divide their assets among their children?

It is important to know that children inherit property or cash, parents do not need to divide the pot equally among their kids. While it makes it easier to divide things equally, it isn't always the best solution. Here are just a few of the things to consider when making an estate plan, according to one expert:

1. An inheritance could be life-changing for one child and merely a treat for another. For parents who choose to divide the inheritance unequally, they should include reasons why in their will or via a personal letter attached to the will. The children who have money could feel less loved if they do not receive the same amount as their siblings do. Parents must explain why they made their decisions.

2. One child cannot handle the responsibility of money. If one child spends money at will, an inheritance instead could be left in a trust, no matter how old the child is. That means a money manager or trusted friend can decide when to give money to that person and for what reason, such as to pay college tuition or medical bills.

3. One child has a difficult personal life, such as multiple marriages. For parents who want to shield their money from a potential ex-in law, they should consider a trust that couldn't be touched in a divorce.

4. Parents already have funded large purchases for a child, including a house or a college education. Whether that money came in the form of a gift or a loan, an executor can deduct that amount from the amount the child would have receive and reallocate it to other siblings who did not receive such financial benefits.

These are not the only reasons to consider leaving unequal amounts. Should they go that route, parents should not feel guilty to doing so. They must remember to provide a note explaining such decisions so children do not wonder after their parents are gone.

Source: Investing Answers, "7 Reasons Your Kids Shouldn't Always Get The Same Inheritance," Liza Hanks, Oct. 26, 2012

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