“Not only did it take advantage of the bigger house, it also used up the inheritance,” said Margolis.
A better deal would have been if the daughter borrowed $ 500,000 from her parents, for example, and signed a promissory note that gave $ 100,000 a year over five years, Margolis said. If the last parent died three years later, the remaining $ 200,000 would “serve as an advance on that daughter’s inheritance.” If the estate did not have enough assets to give her siblings an equal share, he said, “The daughter would have to raise some funds to make up the difference.”
Mr Margolis said families could avoid conflict by developing a “personal care agreement” that describes a caregiver’s services and the type and amount of compensation they receive, e.g. B. a loan to buy a house, regular payments, or a larger portion of the estate. All siblings should be involved in the process, he said.
The stepchildren are out of order
Dividing an estate can be particularly difficult in mixed families. Stepfamily growth is a key reason the percentage of Americans age 50 and older who left their children unequal has more than doubled, to nearly 35 percent in 2010, from 16 percent in 1995, according to a National Bureau of Economic Research published study.
“Parents without stepchildren were far more likely to treat all of their children equally than parents with stepchildren,” said Robert A. Pollak, co-author and professor of economics at Washington University in St. Louis.
However, the study also found that the longer the relationship, the more likely it is that a parent will leave a stepchild with an inheritance equivalent to that of a birth or adopted child, possibly as a result of “trust and bonding” strengthening .
In a stepfamily, if a parent, says the husband, wants to protect their children from a previous marriage, it is best to avoid leaving all assets in a will to their wife and hoping that she will keep the promise that Leave remaining fortune to her stepchildren when she dies, experts say.