Reality: There is a good chance your children or other family members will NOT “do the right thing” if you leave everything for them to determine later.
Parents will often overestimate the generosity and selflessness of their children. This miscalculation can lead to big problems. For example, parents may elect to choose one or a couple of their children to be in charge of their property and this type of “planning” may be done on an informal basis, with no legal documents, just some discussions and promises. While it is true that such designated individuals do sometimes follow through with their responsibilities, though not legally bound to do so (such individuals do the “right thing” in these instances), there are many other instances where children who were once fully trusted by their parents to be fair, equitable and selfless with regard to other family members actually make other decisions because they can.
It is not uncommon for young children to have a disagreement over a toy or a treat, particularly when there are not enough toys and treats to go around. This type of selfish behavior is instinctual, it is human nature. While it is certainly true that we are sometimes pleasantly surprised to witness acts of generosity and selflessness, among both children and adults, we far too often witness much that falls on the opposite spectrum. Just consider your most recent experience driving–how much generosity and deference did you see on the roads?
Am I saying that all people will always act selfishly and look to serve only their own self-interest? No, that would be a very skeptical and narrow-minded view indeed. However, I am saying that such selfishness is deeply rooted within many of us, whether young or old, and therefore, it is usually best to establish certain frameworks and safeguards to protect against such propensity for selfishness. Such protections can be done through proper planning that is customized for you, your goals and the other unique personalities who will be involved in and affected by your planning (now and in the future).
As you are considering your options, you might want to establish checks and balances that will ensure that one or more of your family members are not left with unfettered discretion and/or unlimited access to family resources. This applies both while you are alive (and perhaps elderly and/or impaired) and also after you and your spouse are gone. We see problems among family members at all stages of life.
Finally, please do not make the mistake of assuming that there must necessarily be a large amount of money or other assets at stake in order to have problems among children or others. This is just not the case in most instances. Rather, if there is a pattern towards either end of the spectrum, it is probably the opposite. I would submit that very often the problems arise in situations where there is a limited amount of money and/or other assets up for grabs. For most of us parents, if we are able to be honest and at least somewhat objective about our children (something that, I admit, is not easy), we can recognize certain selfish tendencies in our children and we can come to realize that leaving too much freedom or access to such children could become a problem at some point in the future. Also, as you are doing this type of analysis, don’t forget to factor in the influence of spouses and others who might have the ear of your loved ones. In-Laws can cause or exacerbate many of these types of problems.