Equal distribution to your heirs
Most people have great love for all of their children,
and they want them to share equally in their estates.
An admirable intent, but “equal” is not the same
thing as “equitable.” While dozens of examples
exist, a common problem, often mishandled, is
when a person owns a business in which some of
the children participate. Giving both participating
and non-participating children equal shares of
the business is a near guarantee for disaster.
This blunder has destroyed more businesses and
families than probably any other estate planning
mistake.
If you have a business, a farm, or some
other income-producing asset and some of your
children participate in its management, don’t carve
it up equally between all of your children. Provide
the business to your participating children and
give your non-participant children non-business
assets. If this creates an unbalanced distribution,
consider creating additional assets through life
insurance.