Written by Scottsdale Estate Planning Attorney Todd Smith
The Dana Law Firm has long embraced an important slogan: “Family: work with ours to protect yours.” I have become very close to the Dana family through my association with the Dana Law Firm. It is truly a family business and the Dana family provides the firm with several key employees. In fact, every one of Matt Dana’s children works for the firm in some capacity.
The family is a key concern when it comes to the law, but particularly with estate and trust law. I recently read this article in the New York Times about ways to prevent money from causing a family to fall apart. Clearly this is a concern of all families, wherever they are on the wealth spectrum.
I thought it was particularly interesting that the article suggests preparing an estate plan that ultimately divides the wealth equally among the children. Many times I have had clients ask me to customize the final distribution so that one child gets more or less than the other children for whatever reason. I always respond with the same advice given in this article. In most cases, you are inviting resentment and quite possibly litigation whenever you stray from equal treatment of your kids. This is true, as the article points out, even if one of your kids is a schoolteacher and the other is a hedge fund manager. Whenever I have a client that insists on unequal distributions, I strongly advise them to at least have a family meeting and make sure everybody understands your method so that they know that you are not being arbitrary and giving them the opportunity to consent to your decision.
Another good suggestion in the article has to do with when your children receive their inheritance. Some of our clients are in a position where they are getting older and their funds are clearly much greater than they will be able to spend in their remaining living years. In that situation, what is wrong with making a lifetime gift, not just for estate tax planning, which is undoubtedly important, but also so that you can actually watch your children enjoy their inheritance before you die. That may just be a better approach than having them wait until their sixties to inherit your wealth, possibly at a time when they don’t even need the money anymore.
Our experience with estate planning in Arizona has been that the family issues are much more important to our clients than the technical legal and tax problems that we get excited about as attorneys. One of the great strengths of the Dana Law Firm is that we use our legal as well as personal experience to enhance the process of designing a proper estate plan for the unique family situation of each of our clients.