Blended Family Estate Planning – Planning for the New Normal
The Importance of Blended Family Estate Planning
Once upon a time, the “typical” family was the nuclear family – husband, wife, and 2.3 children. “Once upon a time” being roughly the second half of the 20th century”. Before that, households often included grandparents or extended relatives, and with the higher mortality rates of earlier eras, remarriage was far more common. Thanks to the post-war industrial economic boom providing rising wages, and with better healthcare access reducing mortality and increasing life expectancy by two-thirds, made the nuclear family the dominant family unit in the 1960s and 1970s. Since then, changing social norms means that today’s family structures are again more diverse, with the greater acceptance of divorce meaning that many people are on their second marriage (or more), often bringing children from a prior marriage or relationship. At the same time, there are plenty of couples cohabitating for years but choosing not to get married. Acceptance of homosexuality brought with it single-sex marriages. And on the occasion that tragedy strikes, and a person dies young, odds are that the spouse will remarry eventually. Today, less than half of the children growing up in America are in a traditional family, but in blended families.
It’s time for Estate Planning to Catch Up
Traditional estate planning is really designed around the nuclear family – When one parent passes away, the surviving spouse gets everything, and when the second one passes away, divide it equally among the children. It’s simple. It’s easy. And it’s completely ineffective for the modern family.
Think about it this way. You worked all your life to provide for your family. After you pass away, your spouse gets remarried, and during that early marital bliss converts assets into joint ownership. Well, when your spouse passes away first, the bimbo/himbo ends up with everything, and your children get nothing!
Even if your spouse did keep their assets separate, their new love is still entitled to an “elective share” of 30% of all of your assets. Does that seem fair to you?
Alternatively, you could be in a marriage with a child that’s not biologically yours, but that you raised and loved like your own. Under the law, when you pass away, that child is not entitled to any of your assets.
What if We Don’t Like the Default Laws?
The good news is, unlike most countries, in America you may leave your assets to whomever you want! All you need to do is to create an estate plan that specifies who gets what after you pass away. It’s entirely up to you who you want to leave your assets to - with two little caveats: you can’t disinherit your spouse, and you can’t disinherit a minor child (at least, not ordinarily). What, exactly, your spouse is entitled to depends on your particular circumstances, but if your spouse agrees in writing (pre-nuptial agreement, post-nuptial agreement, or certain other documents) your spouse can waive their right to an inheritance.
Of course, each family is different, and when deciding how to leave things behind, you’ll need to consider what’s right for you and your family, as well as a whole bunch of “what-ifs”. You see, smart estate planning considerations includes contingencies, so that unforeseen circumstances (such as your child’s other parent dying before you) don’t derail your estate plan. The other thing to keep in mind is that you should not assume that people will respect your wishes after you pass away. Some people are less reliable than their loved ones might think, and even if they aren’t, people can and do change, especially when money is involved. Even if you trust your loved ones completely, they may be incompetent at the time, and his or her conservator could push a claim they wouldn’t make themselves.
What Should I Be Thinking About?
First and foremost, if you have minor biological children, who would you want to look after them when you’re gone? And what if they’re unable or unwilling, who then? If you have minor children, it is your responsibility to ensure that enough money is left behind to take care of them – who should manage the money if you’re gone? It is strongly recommended to have one person housing and caring for the children, and another person in charge of investing and budgeting – someone who’s more likely to say “no”. Now that we mention it, what should your money be used for? When should your child(ren) get control of their inheritance? On a related note, who do you consider to be your children? Do you include exclude any stepchildren? Is there someone you raised as your own that’s legally not yours?
What about your spouse (if you have one)? What should he or she get? If you have minor children, does your answer change after they grow up? Are there any other friends or extended family members (or their exes) who you would want to receive something?
If you have married children, would you want their spouses to inherit your assets in case of a divorce? If all your children are successful, you may want to skip them and leave everything to your grandchildren – will you treat them all equally? In what proportion? What about adopted or step-grandchildren?
We’re Here To Help
Simple solutions solve simple problems. The modern family is more complex than the ‘traditional’ family unit, and requires a more complex plan to address their needs. For a free consult to guide you and help you develop an estate plan that’s right for you and your family, call our estate planning attorneys at (239) 791-7950 to schedule a free consultation and address the planning challenges associated with your unique estate and family situation.
. The modern family is more complex than the ‘traditional’ family unit, and requires a more complex plan to address their needs. For a free consult to guide you and help you develop an estate plan that’s right for you and your family, call our estate planning attorneys at (239) 791-7950 to schedule a free consultation and address the planning challenges associated with your unique estate and family situation.