Separate, Yet Unequal, Bequests

A study released by the National Bureau of Economic Research (NBER) in October 2015 found that 30 percent of participants over the age of 70 didn’t have a will. The psychology of wills and estate planning is vast and complex, and not dissimilar to why some people don’t purchase life insurance. It’s simply too overwhelming to face our own mortality and how it might affect our family.

However, dying without a will may add additional stress to your family, because your assets will then be determined through probate by the court of law. If you don’t have any family, your property may even go to the state, to be sold off and proceeds applied to public programs. But more likely, extensive efforts will be made to find distant family members you may have never met.

When it comes down to complex, modern families, the NBER study revealed a few interesting facts. For example:1

  • In situations where there are stepchildren, parents are 30 percent more likely to construct unequal inheritances, giving genetic children more proceeds than stepchildren.
  • However, if a parent had a relationship with a stepchild that lasted at least 10 years, it is more likely that the stepchild will be treated like a genetic child in the parent’s will — regardless of how old the child was when the relationship began.
  • It’s also more likely that parents who have no contact with at least one of their genetic children for more than a year will design unequal bequests in their will than parents who remained close to all of their genetic offspring.

Keep in mind that without a will, children and adopted children inherit equally; however, stepchildren who were never adopted legally will receive nothing.

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1 Isabella Bank. March 2016. “Inequality of Inheritances.” Accessed June, 1 2016.

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