All parents want to minimize the opportunity for conflict among their children once they have passed away. Sometimes, however, conflict arises when parents have gifted money to one of their children and not to the others. Such conflict may be avoided by including provisions in your estate plan for gifts and loans previously made to children.
Parents’ intentions regarding gifts to children should be made clear in their estate planning documents. A document could state, for example, that you are not making any adjustments based on gifts you have made. Doing so will make it clear that none of the children should receive a reduced share of the estate based on past gifts. On the other hand, you could list past gifts that have been made and carefully explain why one child is receiving a reduced share of the estate.
Loans made to your children should also be addressed in your estate planning documents. Verbal loans can be particularly tricky. You might, in this case, make a provision in your documents that classifies all verbal loans as gifts. If, however, there are verbal loans that you do not wish to have considered as gifts, you should state this in writing. If you wish to consider loans made to your children as advances on their inheritance, then this should also be specified in your estate planning documents.
Carefully considering and planning how you would like to deal with gifts and loans to your children will help avoid conflict among them in the future. You should consult an estate planning attorney to ensure that your legal documents provide guidance regarding your intentions.
Learn more at Littmankrooks.com.
