In families with multiple adult children, there is often one child who resides with or in close proximity to an aging parent, and who, as a result, is tasked with the caregiving responsibilities for that parent. This may include serving as an actual home care aide (e.g., assisting the parent with activities of daily living, such as bathing, dressing, toileting, etc.), transporting the parent to doctor’s appointments, helping the parent with household chores and repairs, and/or managing the parent’s finances. The question often becomes whether this “Caregiver Child” (CGC) should receive a greater portion of the parent’s estate at death. This question is generally followed by another: “What do people normally do?”
Some parents are comfortable leaving their assets to their children in unequal amounts (or even cutting out a child out). After all, the contributions that a CGC makes could save the parent from having to pay for 24/7 home care or a stay at a pricey assisted living or skilled nursing facility, leaving more assets for the family to ultimately inherit. These contributions are not typically made without sacrifice: The CGC may have had to quit a full-time job, take unpaid family leave, spend less time with their own family, and incur hardship financially, emotionally, or even physically due to this increased burden.
On the other hand, there are advantages to leaving assets to your children equally, regardless of caregiving responsibilities. An equal distribution upon death helps to alleviate any suspicions of favoritism and reduces the possibility of conflict among the siblings, which, in turn, decreases the chances of a contested estate. By avoiding litigation, you are avoiding legal fees, which also preserves the parent’s assets. Moreover, there are other ways that the non-CGC can still offer support to the parent (e.g., financially, emotionally, etc.) that justifies equal distribution.
Taking all of the above into consideration, there are certain ways that you can utilize your estate plan to level the playing field while reducing the possibility of conflict:
- Personal Caregiver Agreements. Have the CGC enter into a written contract, so that the CGC is compensated for their time, separate and apart from their inheritance.
- Pre-Residuary Specific Bequests. Within your Will or Trust, make a specific bequest to the CGC that comes off the top before the rest of your assets (the “residuary”) is distributed equally among all children.
- Gifting During Life. Gift funds to the CGC, either outright or by creating a standalone Children’s Trust, during your lifetime instead of upon your passing.
- Beneficiary Designations. Make the CGC a beneficiary of your bank or retirement account, such that upon your death, the funds will pass to them directly by operation of law, outside the scope of your Trust or Will.
By working with a knowledgeable and compassionate Trusts and Estates attorney, you can strategically craft an estate plan that accounts for your unique situation, is fair to all, and helps keep the family structure intact.
