Don’t trust your children to do what they say they will do

Of course, we all want to trust our children. For many, their estate plan is trusting a child to do what they know the parent would want them to do. It might be making a bank account joint with one child who “knows” it is to be split between all of the children. Or a house owned with a child who “agrees” that it is to be sold with proceeds divided between the children. But, what if they don’t? Or, what if they planned to, but died before they were able to?

I am reminded of a money magazine article from a couple of years ago. When asked if it would be OK not to do what they promised the parents they would do, 75% of the adult children said it would be OK not to keep their promise! Are your children part of the 25% who can truly be trusted? Do you want to bet your other children’s inheritance on it?

Finally, if your children do, in fact, do what they agreed to, have you considered the negative tax consequences that they might incur?