When it comes to estate planning, few decisions provoke as much uncertainty and emotional weight as than this one:
Should parents divide their estate equally among all their children?
It’s a decision that can either preserve long-term family harmony or create lasting rifts between siblings. While there’s no universal “right” answer, understanding the key considerations can help families make informed decisions, reflecting their values, needs and practical realities.
According to recent research we undertook across 1000 Western Australians, of the 60% who expect an inheritance dispute in their family, 24% believe that the disputes would be between siblings.
The case for equal distribution
Simplicity and fairness
Equal distribution offers undeniable advantages. It sends a clear message that all children are valued equally, regardless of their financial status, career paths, or relationship dynamics. This approach minimises the risk of family disputes and challenges to the Will, including claims under the Family Provision Act 1972 (WA), which can be emotionally and financially taxing.
From a practical perspective, an equal division is straightforward to calculate and administer. Executors face fewer discretionary decisions, legal costs are typically lower, and beneficiaries understand what to expect. Most importantly, it appears to be the most ideal way to preserve family harmony.
Emotional benefits
Many parents find comfort in knowing their final decisions won’t differentiate among their children. Equal distribution recognises that life can change unexpectedly, where a successful child may encounter hardships, while a struggling one might thrive. This approach aims for fairness over time, not just at the time of preparing the Will.
When unequal distribution makes sense
Addressing individual needs
Life isn’t always fair, and sometimes equal treatment does not result in equitable outcomes.
Consider these scenarios:
- A child with lifelong disabilities requiring ongoing support.
- A child sacrificed their career opportunities to care for ageing parents.
- Children who receive more assistance than the others during their parents’ lifetime (eg: home loans, educational support).
- A child who received substantial gifts (like help buying a home)
What must be considered is that the law does not see all children as equal all the time. The Court often deals with the competing needs of beneficiaries and is inclined to choose “fair” over “equal” on most occasions.
Practical considerations
Sometimes unequal distribution may simply reflect practical needs rather than favouritism. If one child has been actively involved in managing a family business, it might make sense for them to inherit the larger share. Similarly, if one child lives nearby and has been the primary carer, they might receive the family home while others may receive equivalent value in other assets.
Finding middle ground
Increasingly, families often find success with hybrid strategies curated to meet their specific circumstances and family dynamics. Some tailored approaches are as follows:
Equitable, not equality
Start with equal base inheritance, then make specific adjustments for exceptional needs or contributions. For example, each child receives 30% of the estate, with the remaining 10% going to the child who provided primary care.
Documenting gifts of loans from the Bank of Mum and Dad
Document significant gifts given during the lifetime and adjust final distributions accordingly. If one child received $50,000 for a house deposit, their inheritance may be reduced by that amount. Be mindful that the law does not automatically count these as advances unless the Will includes a clear intention to treat them as advancements.
Asset-specific allocation
Consider dividing liquid assets equally but directing specific items (such as family business, heirlooms, or property) to the most appropriate recipient.
Why communication matters
How you discuss your plan can matter more than the numbers. In our experience, families often report fewer disputes when the beneficiaries understand the reasoning behind such decisions.
In our view, best practice looks a little something like this:
- Hold family meetings to discuss estate plans.
- Give written reasoning for your decisions.
- Update family members as your circumstances change.
- Consider mediation if emotions are high.
- Include personal letters explaining your intentions with your estate documents.
Cultural and personal values
Families differ widely — be it birth order traditions, merit-based legacies, need-based support, or simply preserving a family business. Modern families often include blended relationships, second marriages and stepchildren. A one-size fits all approach is not enough.
Practical considerations
Before making final decisions, families should consider:
- Tax implications: While Australia does not have an inheritance tax, large inheritances might push beneficiaries into a higher marginal tax rate or affect their eligibility for Centrelink benefits.
- Asset types: Some assets (like family businesses or properties) can’t be easily divided without destroying their value. Some assets are not even part of your estate.
- Timing: Consider whether beneficiaries would benefit more from smaller amounts now versus larger amounts after your passing.
- Life changes: Build flexibility into estate plans to accommodate changing family dynamics. Wills should be reviewed regularly, and particularly after major life events, such as marriage, birth, divorce or changes in health.
Professional guidance is essential
Given the complexity of modern estates and family dynamics, professional advice is invaluable. Estate planning lawyers can help structure your Will to ensure that it aligns with your wishes, and at the same time, minimise taxes and legal challenges.
Financial advisors can model different distribution scenarios and their long-term impacts, helping families understand the practical implications of their choices.
A mediator may support open and calm family conversations surrounding your estate decisions, and we are very happy to support you in these discussions.
The bottom line
Whether you choose equal or unequal distribution, clarity of purpose is what counts. Equal shares can reflect fairness. Unequal shares can recognise special needs or contributions. The most important thing is that your ultimate decisions align with your values and circumstances, are clearly explained to those affected by them and are always updated to meet life’s changes.
What matters most isn’t achieving mathematical equality but creating a plan that strengthens your family’s relationships and supports their long-term wellbeing. The key lies in making thoughtful, well-communicated decisions that reflect your genuine intentions for your family’s future.
The best inheritance is more than money. It is a legacy rooted in love, clarity and lasting relationships.
Ensure your estate plan reflects your values and helps avoid family disputes. Contact our experienced estate planning team today for personalised advice tailored to your family’s unique needs.
