ESTATE PLANNING
they decide to divide assets equally among both successful and less successful kids anyway. That not only inadvertently keeps the less successful ones dependent in perpetuity, but it shortchanges more responsible heirs. Furthermore, that approach makes it more difficult for the family to preserve wealth past the next generation.
Advisors can guide clients here, helping them address underlying issues such as the poor financial skills or dependency of some of their children. That’ s better than relying on equal distribution as a quick fix to problems.
2. Success to the successful. When heirs who are more competent or involved in family businesses receive larger bequests, the assets often flourish, and that justifies the parents’ initial choice to give unequally.
But if there’ s a lack of transparency here, it can erode trust among the kids and create long-term family divisions. Financial advisors should encourage clear communication and inclusive decision-making to prevent such outcomes.
3. Eroding goals. Parents might need to accept that one heir will never achieve financial independence, and that giving them equal amounts might lead to the erosion of the family’ s long-term wealth goals— and that there are limits to how much compassion can be taken into account.
Advisors should work with families to set realistic goals and encourage personal development among all heirs.
Legal And Ethical Considerations
Parents have no legal obligation to divide assets equally( as long as the estate documents have been written free from undue influence and haven’ t been drafted fraudulently or incompetently).
But if the unequal treatment isn’ t explained, it can lead to costly will contests and strained sibling relationships. Ethical estate planning must extend beyond legal documents to include clarity, communication and reconciliation among the parties when necessary.
Financial advisors can facilitate this process by recommending letters of intent, family meetings, or videos that explain the rationale behind the estate plan. Such measures can reduce misunderstandings and foster a sense of fairness among heirs. Advisors can also recommend staggered distributions, trusts with controls, or clauses that reconcile lifetime gifts with bequests to maintain perceived fairness.
Planning Considerations For Unequal Bequests
Advisors can help families explain why the bequests are unequal in certain situations, as they are likely to be in the following cases:
• When one child has provided unpaid eldercare or managed a family business.
• When one heir has received much more support during their lifetime.
• In cases where a beneficiary has special needs or chronic conditions.
• When family members have been estranged in the past.
• When there’ s a risk of financial abuse.
By addressing these considerations, advisors can help clients create estate plans that are fair and that reflect each child’ s unique needs and contributions to their families.
Here are some things you can do as a financial advisor to help clients.
One is to model possible outcomes, including the risk that compassion for one child could result in the dissolution of the wealth over time. Kim discusses this in his studies of systems, saying supposed fixes can lead to unintended consequences. Have your clients thought through those? And if they have, do they have an alternative contingency plan in case such unintended, and negative, consequences arise?
You’ ll also want to anchor the clients’ plans in their values— what they want for their legacy, not just their asset totals.
If the client wants to reward a child for how much they’ ve helped or how independent they are, make sure the plan reflects that value.
You’ ll also want to put governance mechanisms in place— which means encouraging the creation of family councils and using purpose statements and succession charters to make the family wealth dealings more transparent and explain the reasoning behind them.
You’ ll want to make sure that the clients have put lifetime gifts into their plan. They should document and value previous gifts to reconcile these with bequests, which will help families maintain a sense of fairness and transparency.
When heirs who are more competent or involved in family businesses receive larger bequests, the assets often flourish, and that justifies the parents’ initial choice to give unequally.
The families will also want to anticipate legal challenges by family members, which means they should involve legal counsel early and thoroughly document their decisions to reduce the risk that someone will sue.
Crafting Ethical Estate Plans
Equal division of assets among heirs may seem fair on the surface, but the complexity of family dynamics often requires a more nuanced approach. By integrating empirical data with systems thinking, financial advisors can help families avoid conflict, foster understanding, and sustain their legacy across generations. Ultimately, the best estate plans are not just legal documents; they are ethical blueprints for multigenerational relationships. When crafted thoughtfully, unequal bequests can be the most just expression of a parent’ s love, ensuring that each heir is supported according to their individual needs and circumstances.
MATTHEW ERSKINE is managing partner of Erskine & Erskine in Worcester, Mass., which provides legal and fiduciary services for unique assets.
54 | FINANCIAL ADVISOR MAGAZINE | JUNE 2025 WWW. FA-MAG. COM