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The Basics of Estate Equalization

Updated: May 8, 2023

We have helped countless farmers in the Central Valley set up Estate Equalization plans for their families. Estate Equalization allows one of the children to inherit the farm, without leaving the other children in a "lesser" situation. The “Equalization” part of Estate Equalization allows you to pass on an equal amount of wealth to your beneficiaries in a tax efficient way. This blog gives a good example of how we do so.

Estate Equalization is a crucial concept for affluent business owners to utilize in order to pass on their estate, as well as their business, to the next generation in an equal and fair manner to their children. All too often when Estate Equalization is not utilized, family members can come into nasty conflict over their parents’ assets. What Estate Equalization in essence does, is that a plan is created that outlines who receives what. If the parents have multiple children, perhaps only one of the children intends on taking over the family business. If no plan is created, then the child that takes over the family business is greatly enriched while the other children are left with little to nothing. Situations like these are very common, and can cause great strain in the relationships of siblings. With Estate Equalization, not only can you prevent these inequalities, but you can also grow your assets, protect them by using tax-free life insurance distributions that helps pay any estate taxes that become due, all while creating another supplemental income stream during retirement.

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