Ask Paul: Should we leave our kids unequal inheritances?

Dear Paul,

My husband and I have two children.

Our daughter and her husband have given us two grandchildren, while our son and his wife do not have children and are unlikely to do so.

We want to support our grandchildren in our will. How do we do this in a way that is fair and equal for everybody?

Do we leave less to my daughter because her children will inherit some of her share? - Melinda

Oh, goodness, we are about to step into a minefield, Melinda. Danger is everywhere! The drama that I see 'unequal' wills creating is a genuine horror story.

My dad was a country doctor. Money did not worry him; he loved medicine and worked until 81 and died at 81.

One year he called me about a Money magazine budget planner he had done. He was earning about $80,000pa part-time in his later years and was shocked to discover - wait for it - that he spent $12,000 a year and asked if he should stop going to Rotary meetings on a Tuesday night.

This became a popular family joke.

But he taught me something about money. I only have one younger sister, who has two beautiful adult daughters, whom we love. My wife, Vicki, and I have three great adult kids; our four granddaughters came after my dad died.

My sister had a good career and owned a house, but my business was doing really well. So, I suggested to Dad that he leave my sister more than me.

His response was categorically 'no'. He said he loved us equally, that we had one more child as a choice and our careers were also our choice and he was leaving us 50% each. But he asked that if it was needed, could I help my sister with part of my inheritance?

Good one, Dad. Your children's choices are their choices. You want to be fair and equal, and in the absence of a special situation, such as a disabled child or grandchild, I suspect you would be better off not making judgements but being fair and equal.

All of this is very personal to you and your family. If the child with no children is a multimillionaire, maybe your inheritance can be done differently.

But even then, please chat with your kids about the will not being 50% each.

I am also sure there are things you can do for your grandkids - maybe a regular investment plan for them, school fees or other things before the inheritance.

Unless there are special circumstances, or reasons all the kids agree with, my experience says to divide your estate equally.

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