How Do You Plan to Divide Your Estate?

Here's and interesting piece from the Wall Street Journal discussing how to share your estate with your kids. It made me think about how an estate can be broken up in different ways depending on the circumstances and I thought I'd list our current plans. Here they are:

• Our current will divides our estate evenly between our children if anything happens to both of us before they graduate college.

• Once they get through college, we'll likely decrease the amount they get, giving them part of our estate as well as giving some of it to charity.

• As the years progress and we're more comfortable with the amount we have saved for retirement, we'll start to give the kids (and grandkids, hopefully) part of the estate each year. We'll also give some to charity as well.

That's the plan for now, but since our kids are young there's a looooong way to go and the plan is highly subject to change.

How do you plan to divide your estate? Equally among kids? More to one (or a few) kid? Have you even thought of it? Do you even have a will? If not, you get a "tsk, tsk" from me. ;-)

And in case you're wondering, you can find a ton of information about wills by visiting my estate planning category.

Comments

[Lisa@Cents to Save]

Our estate will be divided up evenly between our three children.....That is..... If there is anything left after this wild and unstable economic episode :)

[Scott]

Interestingly enough, we just signed our will and testamentary trust last night. We are dividing the estate equally among the kids but right now we only have one. If, God forbid, she predeceases us we divide amongst other family members in varying percentages.

What was a more interesting discussion for us was how to set the testamentary trust up regarding how much money the kids get at certain ages. We set ours up such that they do not get all of it until they are 35 (basically).

[cmadler]

My paternal grandparents (who died after their three sons had married but before any children were born) split things evenly among the three. My maternal grandparents have always been very clear that 2/5 will go to each daughter (who are both married and have children), and 1/5 will go to their son (never married). My parents intend to split things evenly.

In my wife's family, there is a strong expectation that everything will be split evenly, which, when my mother-in-law dies, is likely to lead to the loss of a farm that has been in the family for over 100 years. Her father had enough land to split it up into 40 acre parcels, and had cash to help even things out. But now my mother-in-law has 40 acres with one house on it (can't be split 3 ways), and not enough other assets. So to be "fair" she intends to leave 1/3 ownership share to each child, which I am 100% confident will lead to a sale.

[LC]

Can you set up a will before you have children and say something like "divide my estate equally between all of my future children" or do you have to name them in your will, updating it after each birth?

[FMF]

LC --

Yes, you can include future children in your will.

[GarvFinancial]

Gaurav here...it is very important to set up your estate plan. It is one critical aspect of financial planning that people forget about. Consult with a good attorney about a decent estate planning package. A decent one can run between $1000 to $1500.

[CD]

Half of mine goes to charity (local hospice); the other half is to be split between one of my brothers and my best friend of 27 years.

[Bill]

We plan to generation skip. We will give most of our money to our grandchildren.

My wife and I were sort of surprised when her parents took a large inheritance from her grandparents and kept it all. They were in their 50's and we'll on their way to their own very conmfortable retirement. The inheritance did not materially affect their own retirement, so why did they need it. My wife and I didn't need the money really, but she has cousins who were younger, just starting families and buying houses. The impact to them could have been great.

We think that padding our kids nest egg will be less important to us than helping mature grandchildren get a good start. Charity will get a chunk too.

[Gino]

My thought was always to set up a scholarship fund for grandkids, greatgrandkids, etc. See as I have no children at the moment I have not bothered looking into yet. But I would like to be able to at least help out with educational expenses for not just immediate family, but even distant family I will never know.

But education is extremely important for me so I hope that what little legacy I have will go towards furthering my family's education and giving my offspring a better chance to go to college and earn themselves a better life.

[Kate]

We have only one child and are leaving everything to her. I can't remember what our exact plans are if she (to echo a previous poster: God forbid) dies first, but I think we split it between our parents (all of whom are divorced/legally separated) and my sister. DH's brother is very irresponsible, so I think we left him out.

I found Bill's comments about skipping a generation thought-provoking. Both of my parents lost their parents within the past couple of years. My dad's long-widowed mother left her estate equally to her two sons -- my father, divorced with two kids, and my uncle, married with three kids. All grandchildren are adults, and I would say all of us probably fall in the struggling-to-establish-ourselves-but-not-poverty-stricken category, though I could be wrong about my two youngest cousins; they may be closer to "poverty-stricken." The two sons are both not hurting; one is working and doing quite well, and the other is comfortably retired. Yes, her money probably could have gone directly to her grandchildren and been more of a help, but I know my father shared some of his inheritence with us, and I don't resent (and don't think my sister resents) him keeping the rest; I assume my uncle did the same with his kids. My uncle gave all of my grandmother's best jewelry to me and my sister; I don't think that was in the will, though maybe I'm wrong. The only regret I do have is that my uncle urged me to pick furniture and/or knick-knacks before the house was sold, but my grandmother was in a nursing home at the time, so my dad wanted to keep all of the money from the sale of the house and furniture for her, and I ended up with nothing I would have wanted. The jewelry is nice, but I never saw my grandmother wear it; I wish I had something that reminds me of her. Lesson to be learned: ask your loved ones ahead of time if there is anything they want to remember you by.

My maternal grandparents divided their estate equally between their four children (two married, one divorced, one never-married). There are six of us grandchildren; they did ask us if there was anything we wanted from their estate, and we got those things. None of my grandparent's children are doing well financially for various reasons, so I am very glad they got the bulk of the estate; they can use the help.

[Kevin]

LC - the terminology the usually use is "to all my children (or descendants), equally" or "per stirpes" which is fancy latin that means if that child predeceases you, his/her share will go to his descendants.

[Kimipele]

My husband was the executor of his parents estate which was to be divided equally between my husband and his sister. However, we were unaware that since my mother in-laws death, my father in-law changed his will to leave everything to my husbands sister, disinheriting my husband and his "issue". When he passed away this year, my husband was left with a legacy of disinheritance. His father didn't even leave him a used coffee cup or explanation as to why he was disinherited. We were left to wonder what we had done and why he had just not informed my husband of the change in estate plans. We would have been fine with his decision either way. I think it was the surprise factor that caught us off guard. Our children each have copies of our estate plans and final wishes. Anytime an update is made, they are informed.

[Matt]

All our assets of consequence are in a family trust. As such, there won't be an estate of any consequence to divide.

My wife and I still have wills, but they concern themselves principally with the distribution of small personal property with great sentimental value but not worth much on the market. When the children start coming, we'll amend them to deal with custody issues. But the wealth stays in the trust, and hence outside the estate.

[mary]

Hello your help would be appreciated thanks. We are canadians and are now making our will. We had planned to leave and equally amount between our 2 daughters and our three biological grandchildren is this legal and acceptable with any protests Thank you Mary

[Old Limey]

Mary
1) This topic is 4 years old so it won't attract much response.
2) You didn't state whether you were living in Canada or the USA. We lived in Toronto from 1956-1958 but we had just emigrated from England and were newlyweds at the time. Most people in the USA have their wills drawn up by an attorney and also use a Living Trust in order to eliminate the need, hassle, time, and expense of having to have their will go through probate upon their decease.

Why not check out the Legalzoom.com website, you may be able to generate your own will at little cost.