Modern families may confront a few extra challenges when planning their estate.
As times change and social norms continue to evolve, families are becoming increasingly varied in their dynamics. We don’t all look like the conventional nuclear family once famously depicted in “Leave it to Beaver.”
With these new realities – including the legalization of same-sex marriage, an increase in non-married couples, advances in reproductive technology and a steady divorce rate – it’s important to ensure your estate plan accurately represents the specific needs of your family and the goals you have for your loved ones and your legacy.
Your estate plan should address your family in its entirety – however large or complicated it may be. With about 50% of marriages ending in divorce, this holds true for blended families in which there may be one or more former spouses who may lay claim to family wealth. Some states will automatically revoke a will that names a former spouse as an heir or lists an ex as power of attorney, but you may need to include a provision as part of your divorce that removes or outlines your ex’s fiduciary role, if any, especially if he or she is still listed on an irrevocable trust for your children.
More and more often, couples are choosing to live together without getting married, sometimes to avoid the need for a prenuptial agreement. If this is the case, have you thought about naming your partner as beneficiary? Have you put the safeguards in place to ensure your longtime love isn’t left out?
These days, children can become part of a family in seemingly endless ways – adoption, remarriage, in vitro fertilization and even as posthumous births, in and outside of marriage. The key is to think through who should inherit what in a way that feels equitable. While that may feel intuitive, keep in mind that families have found themselves embroiled in expensive and emotional legal battles when potential inheritances seem unfair. Consider carefully the implications of your decisions for all your biological and adopted children, stepchildren, informally “adopted” children and anyone else who you believe should benefit from your estate, and make sure your wishes are thoroughly documented.
If there are adopted children in your family, make sure they are accounted for in your estate and trust documents according to your wishes. While adopted children are now legally treated much the same as biological, that has not always been the case. Especially with multigenerational estates where old documents could still be in use, be sure to thoroughly review and revise as needed.
Assisted Reproductive Technology (ART)
With the life-giving advances in reproductive technology, new opportunities for complications in your estate are also a possibility. But proactive planning can once again help make sure your wishes are respected and upheld.
In cases where donors or surrogates have been used, such as in vitro fertilization or implantation via surrogate, there is the potential for those individuals to claim certain rights if not preemptively addressed. Work with your advisor to clearly define the role of each individual who played a part in bringing your children into your life. While contracts are usually put in place before these procedures to outline those kinds of details, it is still wise to make sure this issue is fully addressed in your estate plan.
Posthumous birth occurs when a parent passes after a child is conceived. And with cryopreservation, it’s now possible for a child to be conceived and born after the death of one or both parents. If you or your spouse has preserved genetic material, it may be worth addressing this highly personal and sensitive matter in your estate documents.
Rather than something set in stone, think of your estate plan as a living document that should evolve as your life does. While the process has the potential to be incredibly complex and daunting – with thorough planning and the guidance of your financial advisor – it can also be a great source of assurance that your wishes will be honored down the road.
Raymond James financial advisors do not render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.