When It May Not Be So Simple - Family Dynamics

A lot of estate planning deals with issues other than clients’ net worth. The highest hurdles are often tethered to people and not things.

A vast majority of our clients contact us with at least one similar goal in mind: how can we care for our children when we are unable?

This may seem simple. Our clients want to leave everything leftover upon their deaths to their children in equal shares. Done deal.

Sometimes, however, there may be some… complications.

• What if their children are very young?

• What if their child has a physical or cognitive disability? 

• What if their child is incapacitated or has disabilities at the time this gift is made?

• What if their children have addiction issues?

• What if their children are financially or developmentally immature?

• What if they don’t like their children’s life partners? Or fear an acrimonious split?

• What if they want to care for their children, but not spoil them to the point where the children do not pursue their own careers or endeavors?

No one desires any of the above. But these challenges can happen, and must be met with a plan. Our clients need peace of mind that the resources left for a child actually aids that child—in the state they are in at that time, which may involve some of the above conditions. Clients need to be assured that their child’s inheritance doesn’t inadvertently hurt loved ones, or unexpectedly go elsewhere (like to an estranged spouse or lurking creditor).

Or, sometimes, the client doesn’t want anything to go to their children; or they want an uneven distribution to their children. That’s even more of a reason why they need to have a plan specifying their desires. Simply “leaving it up to them” or giving one child substantially less than another, without proper safeguards, invites litigation. And we know our clients certainly don’t want their life’s work to go into a bunch of litigation lawyers’ pockets.

We talk through these situations with clients, as well as ones with more complicated family dynamics. They are hard conversations, but so important to talk about and plan for now, while you can.

Call and schedule a consultation. We can talk about the above, or anything else specific to your situation.

Why Would A Married Couple Need an Estate Plan?

A friend of ours recently contacted us with a question that comes up frequently enough that we wanted to share it with you:

We are married and everything that we own is held jointly/as community property. We own a house, but we don’t have any kids and we don’t have debt. Do we need a will? Do we need a trust? Why?”

To the first question: Yes. You need a will whether you have a trust or not. (Click here to read our post explaining what a will does. And click here to read about intestacy.)

To the second question: Yes. Because….

1. Incapacity. Incapacity doesn’t just mean “coma,” (although that counts too). It could be that you went into surgery and had a bad reaction to the anesthesia so you can’t quite function as you ordinarily would. Or, it could be dementia. It could be temporary, it could be permanent. But a will doesn’t let you address incapacity situations. A trust allows you to plan for incapacity. It allows you to plan for who will take care of your assets and use your assets for your benefit when you are still living. Just because your spouse is on title doesn’t mean your spouse has all the necessary authority to care for you in the event of your incapacity. (Click here to read our previous post explaining incapacity.)

2. Contingency planning. Wills do not address all contingencies. But trusts allow for lapses and contingency planning. What if your spouse becomes incapacitated after you do? What if your intended beneficiary is still a minor (younger than 18 years old)? What if your intended beneficiary has a substance abuse or gambling issue later on? What if your intended beneficiary has special needs and requires means-tested government assistance? What if your beneficiary predeceases you? These issues can be planned for in a trust in advance.

3. Probate. You’ve probably heard the term “probate” with some negative connotation. (Click here to read our previous post explaining probate.) If you have a trust, you avoid probate. Probate takes about 18-24 months; it’s a public proceeding; and it’s expensive.

So even if you are married and hold everything jointly, that may only ensure that your spouse receives your assets upon your death. But so many other scenarios can occur. We might recommend you consider a trust given your situation and desires. All of our recommendations depend on your specific family and estate planning goals. To ascertain what is best for you we would need to meet with you, in a free consultation, to understand your goals, assess and explain your options, and provide you with a recommendation tailored to your situation. Call or email us today.