Planning for alternative families is more important than planning for traditional families. While planning improves the outcomes for all families, it is simply crucial for alternative families. This leads one to ask the simple question: Why? Because the law is designed to take care of mainstream, traditional families.
So, what is a traditional family? A traditional family is one with an opposite-sex couple, a first marriage for each, with common biological children. What is an alternative family: Anybody else, including unmarried couples, remarried couples, Brady Bunch families, etc.
As estate planning attorneys know, if a person dies without a will or trust, their assets are divided as set forth in state intestacy laws. Unfortunately, those laws don’t contemplate today’s complex families.
For example, let’s take the Brady Bunch characters. There’s Mike and Carol and each of them has three kids. If they were unmarried, then upon Mike’s death, his assets would go equally to his three kids, or perhaps his children might share with his parents. Nothing would go to Carol or her three kids. Guardians would be required for minors. If Greg, the oldest child, were of age of majority, his assets typically would go outright to him, even though he might not be ready to manage his assets. He might choose to use his inheritance to buy a sports car, rather than paying for college.
If Mike and Carol were married, then half of his assets might go to Carol and the remainder might be split among his three children. Still, this could be a real problem. Let’s assume that Mike had all the property in the marriage, now Carol would have to live on ½ the property since the rest would go to his three children. Even if they were married, if Carol died before Mike, none of Mike’s property would go to Marcia, Jan, or Cindy.
This is not what they would probably intend. A will or trust would allow Mike and Carol to leave the assets as they would want. For example, if Mike and Carol wished, they could leave all assets in a trust for the surviving spouse, with the remainder to go equally to all six children at the death of the surviving spouse. The assets going to the children could remain in trust for the children until they are capable of managing the assets. Often, after the death of the surviving spouse, the assets are left in a “pot” trust for all the children until the youngest child either has reached age 25 or has completed an undergraduate college degree.
Families today are more complex than ever. The one-size-fits-all of intestacy is ill-suited for the modern family. Even traditional families benefit from a tailored estate plan. But, a tailored estate plan is crucial for the alternative, modern family of today.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
www.aaepa.com
Steve Hartnett
Latest posts by Steve Hartnett (see all)
- Planning for the Secure Act - January 14, 2020
- The Secure Act and What It Means for You - January 7, 2020
- Tax Planning for 2020 - December 31, 2019
