My father has six children and 13 grandchildren. Being mathematically inclined, he looked at those numbers and figured, “6×8=48 and 13×4=52. 48+52=100. I will give 8% of my estate to each of my six children, and 4% of my estate to each of my 13 grandchildren. There. Done. Simple. I’ve taken care of 100% of my estate.”

Except it’s not so simple. As Ron Blue urges in his book Splitting Heirs, you should “Love your children equally and, as such, treat them uniquely” (p. 82). Why? Because “the greatest inequality is treating unequal people equally” (p. 83).

Well, among my father’s children, we are definitely not equal! And so I just wrote a letter to my father requesting that he treat me unequally.

Dear Dad,

I had a rather emotional last couple of days as, first, [one of my sisters-in-law] visited us, and, second, [several of us] discussed [the needs of one of my sisters]. . . .

Simply stated, [my sister-in-law] suggested maybe I should view [my sister] as stuck with the emotional maturity of a teenager. She’s not going to “get better.” And I should quit “expecting,” “demanding,” “pushing,” or otherwise hoping for [my sister] to become anything other than what she is or to move anywhere beyond where she is. With all her good intentions and desires, at 48 years old, she’s not going to change.

(Let me be careful to note: what I’ve just said is a relatively fully worked out statement of implications from a much simpler idea that [my sister-in-law] planted in my mind. I am the one who came up with the kind of “programmatic” perspective.)

Anyway.

My purpose for writing is this: If I adopt this view of [my sister], and I believe I should, I realize I had better begin planning for the almost inevitable future. For example, she is not going to be able to provide for herself in retirement. She won’t–she can’t–think that far ahead. And so she won’t make any preparations for an event that, hopefully, is 20 years in the future. Well, if she won’t, then who will? I sense that responsibility falls to me. Or to Sarita and me.

So what can we do? One thing: set aside some funds for that purpose and invest them in her behalf.

Where can we get these funds?

Well, we can certainly carve some funds out of what we already own . . . or what we will own in the future. And/or . . .

“Y’know, Dad has planned to give us 8% of his estate. Supposing his estate is still worth [$x] (as he told me it was a few years ago), 8% of [$x] equals [$y]. What if, rather than giving that money to us, money that we really don’t need, . . . what if he were to give that to [sister], instead? Or, better yet, what if he didn’t give it directly to [sister] but . . . suppose he set up a trust fund in her behalf (over which I might serve as primary trustees and [my next younger brother] could serve as backup–or vice versa, I really don’t care) and he put those funds in the trust? Maybe [my sister]’s portion, directly–her ‘[$y]‘ [or whatever it is]– should also go into this same trust. . . .”

Basic thoughts and ideas (subject, of course, to review by a competent estate planning attorney):

• If John and Sarita are supposed to help fund [sister]’s retirement anyway, it doesn’t make sense for Dad to give them an inheritance from which the government will take about 40% in income taxes. It would be better for all concerned if the inheritance money Dad would have given to them went, instead, directly to [sister]’s benefit.
• Considering my new view of [sister]’s capabilities (or incapabilities), I’m not sure it makes sense to give any such large sums to [sister] directly anyway. Wouldn’t it be far more loving to create a trust fund for her?

So, Dad, I’m wondering: are you willing and able to help make this happen? Are you willing and able to get your final documents modified in such a way? Again, supposing your estate is really worth, say, somewhere in the region of [$x], the net benefit to the family of this kind of change could be well in excess of [$z]. Easily.

I guess there’s something else that goes along with what I’ve just written.

If you make this change, it would be really nice if you were to say something about your thinking in this regard. For example, since I’m suggesting, in a way, that you “cut me out of your will,” it would be really nice if you were to say some words about me–hopefully positive words [smile]– to reassure not only me but any- and everyone else who looks on, that you’d didn’t “cut me out” out of spite or hatred or something like that, but, indeed, you love me as much as any of your other children and you redirected what would otherwise have been my inheritance to [sister] in response to my suggestion. –Something like that.

It would probably be a brilliant idea, too, if you were to discuss not only with an attorney, but, much more, with some of us, your children, your thoughts and intentions with respect to establishing a trust for [sister]’s benefit. My sense (though I am not an attorney): it makes most sense for you to establish the trust by means of your final documents, rather than pass on the funds to [sister] and then expect either her, or someone in her behalf, to set one up after you are gone.

These are some of my thoughts. I am hoping you might direct your attention and energies toward them.

Love,

John

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This entry was posted on Thursday, September 11th, 2008 at 6:08 am and is filed under estate planning, inheritance, kids, legacy planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.