To save time, money, and legal resources when working on your estate plan, you may opt to name multiple children as beneficiaries in a single trust document. While you may have made plans that are deemed equitable, they may not necessarily entail equal distributions amongst your children. Of course, when your children have the opportunity to closely compare their inheritances, this may cause some friction. Without further ado, please continue reading to learn how to make your children’s trust as fair as possible and how an experienced Putnam County trusts attorney at the Law Office of Andres D. Gil, PLLC, can help you minimize the chances of family conflict down the line.
How can I make my children’s trust conditions fair without causing conflict?
The bottom line is that if you do not plan to make your children’s shares of the trust entirely equal, you must offer clear, transparent language to explain why. For example, you may order your appointed trustee to give one child a greater distribution because they have more financial responsibilities, such as being a homeowner, having small children, etc.
Well, to make this fairer, you may set an incentive-based distribution for your other child. Here, you may state that this child can eventually receive an equal inheritance upon purchasing their first home, welcoming their first child, or any other accomplishment or relative comparison (i.e., graduating from higher education, starting their own business, getting married, etc).
Is it fair to make one child a trustee and another one a beneficiary?
Per New York State law, it is legally permissible to have one child serve as the trustee of your trust document while you designate your other child as the beneficiary. However, this does not necessarily mean that we would advise you to do so. This is because, at the very least, your trustee should not have any conflicts of interest with your beneficiaries.
So, in a horrible scenario where jealousy comes into effect, your trustee-child may favor their own interest over that of your beneficiary-child. Therefore, they may not administer the full portion of their allotted inheritance, and rather keep some of it to themselves so that the distribution is equal rather than equitable.
If your beneficiary-child gets word of this, they may bring their issues to the New York State Surrogate’s Court. Even if they do not take legal actions, your children’s relationship may be permanently severed. So, to play it safe, you may sooner name a neutral third party to this important role, such as a professional fiduciary or corporate trustee.
If you want to ensure you have a strong legal strategy with a reliable team in your corner, please look no further than the Law Office of Andres D. Gil, PLLC. A skilled estate planning attorney in Putnam County is ready to be of any service to you.
