Stoke That Sibling Rivalry

I was appointed the finance correspondent for Senior Life Advisor, an online magazine for investors near or in retirement.  The articles for Senior Life Advisor were designed to offer actionable information as well as items of interest about economics, investing and personal finance.

If you’re thinking about estate planning and what you will leave for your children, here’s a novel but important idea.  To make sure they each get the same amount after taxes, leave them unequal inheritances.

This is because each child likely faces a dramatically different tax regime and as a result, their inheritance will be taxed very differently.  As just one example of why this is so, consider that when you inherit an investment account, you also inherit the tax liability that comes with it that is largely influenced by your own situation.  

The devil is in the details, but consulting your tax advisor with the idea that you want your children to enjoy the same after tax inheritance is an important first step.  

Further this approach raises one of the most critical, but widely disregarded pieces of estate planning advice:  Talk to your family before you depart to tell them your goals and intentions and what they can expect, especially if, when your willis being read, each child learns they may be getting more or less than their sibling.