Is it ever OK to leave your children unequal inheritances? On the face of it it may make perfect sense if you have one child who is financially secure, with a high-flying career and earning a six-figure salary. However, circumstances change and this is yet another example of when people decide to predict the future when drawing up their wills and feel that they know exactly what the circumstances are going to be for everyone involved at the point when they pass away.
Sometimes it may make sense to leave more to one sibling, but it can cause hurt feelings and turn relationships toxic.
Some of the reasons people use for deciding on an unequal split are:
- to ensure there is provision for grandchildren, especially when one sibling might never intend having children
- breakdown in relationship with one child and/or they did not want to provide for their partner/spouse who they did not get on with
- trust issues with a child to spend their inheritance wisely
- some children had received more financial assistance while the parents were alive so this was an attempt to equalise things
- less financially stable and/or had more care responsibilities
This is borne out by a survey of 2,000 people from Netwealth who found that only 53% of parents planned to divide their wealth evenly among their children. Of those who said they would split their money unequally, 20% decided to give more to the child they trusted to spend it wisely; 14% said they were estranged from a child and 7% said they would give less to one child because they did not wish to support their partner. More common reasons were that parents had already provided significant financial support to one child and wanted to balance things out (24%) or because one child had less money (22%).
An unequal split of estate was more common among parents with larger estates. Only 28% of parents with £500,000 or more planned to give an equal share compared with 66% of those with estates worth between £50,000 and £250,000 and 54% of those with estates worth between £250,000 and £500,000.
Whatever the reason for making these decisions, I'm sure the last thing parents would want is to cause an irrevocable rift between their children, leaving a toxic relationship behind. Sometimes it may not be possible to achieve exact fairness but the most important thing is to have the discussion with your children. The survey mentioned above found that 19% of parents have not discussed their plans for their wealth with their children.
Being open and transparent is the best way forward, and of course to make sure you have a Will in place which reflects those wishes.