Treating Children Differently but Fairly in Trusts

When distributing assets to children, fairness doesn’t always mean equal shares, especially in cases like family businesses or farms. For example, if one child works in the family business, they may deserve a larger share due to their contributions, but this can risk resentment from siblings. To balance this, trusts can include flexible provisions, allowing trustees to make equitable adjustments rather than rigid, overly specific instructions that may become outdated. Life insurance can also equalize distributions, providing non-business-involved siblings with comparable value. Separate trustee instructions outside the trust can guide decisions without binding future changes, ensuring fairness while giving trustees the freedom to adapt to evolving family dynamics

Real Life Example

Our clients owned a family business and one of the two heirs, their son, was working hard to help grow the business while their daughter was busy raising two wonderful grandchildren. The business grew with the help of their son and it was more successful than they could have imagined. They planned to split their estate equally amongst their two children. However, they wanted their son to inherit the business and its assets. Despite the son working hard for over a decade the distribution of their estate was wildly disproportionate. The value of the businesses physical location, it's financial holdings and inventory were substantial. Through careful planning we were able to equalize these distributions, avoid any future resentment among the siblings, and still reward the son for his hard work and effort.

How to equally distribute your estate and avoid resentment amongst your heirs.