What Exactly Is Modern Estate Planning? - Werner Law Firm
What Exactly Is Modern Estate Planning? - Werner Law Firm

What Exactly Is Modern Estate Planning?

The model of the typical family has been shifting away from the “traditional” setup since the post-war era. From married couples with children (which accounted for about 79 percent of families in 1950, but only 55 percent in 1990), to a combination of heterosexual married couples, single-parent households, same-sex households, cohabitating parents, blended families, multi-generational households, childless families, and more. This transition towards a more diverse concept of family has coincided with improvements in women’s and minority rights.

But not all aspects of the law have caught up. Estate planning conventions may often still favor or assume a first marriage or simple, nuclear family. Thus, parents with a history of divorce, remarrying, or cohabiting partners may need to consider amending their estate plans to protect themselves and their beneficiaries, and to ensure that their wishes are properly conveyed through currently available modern estate planning tools.

Modern Estate Planning for the Modern Family

The main modern estate planning consideration is ensuring that your wishes are carried out correctly. Minor errors, clerical mistakes, and other similar issues can throw a wrench into any plan, but are relatively inconsequential in comparison to something as major as a forgotten beneficiary, an outdated plan that leaves a considerable amount of assets to an ex-spouse, and other documents that no longer accurately reflect your wishes.

What might seem like an afterthought now could become the source of years of conflict and litigation in the future. Neglecting to amend an estate plan or create one in the first place can lead to a considerable headache for your family, especially if you are leaving behind an unmarried partner, or children from a different marriage. While it is certainly is never too early to set up or amend an estate plan, it often can be too late.

Never Too Early to Plan

Dying without an estate plan triggers intestacy laws, which determine how the decedent’s estate is distributed in the absence of any legally accepted plan. This often means that most of one’s belongings will automatically pass to the next of kin, which excludes unmarried partners, common law spouses, and stepchildren. There are exceptions to this – you may, for example, own accounts and properties with designated beneficiaries, who will receive said accounts or assets upon your death regardless of any will or estate plan.

Yet again, setting and forgetting to amend these designations can lead to further heartbreak in cases where they no longer apply or reflect your current wishes. If you have dependents or potential beneficiaries, consider going over any existing estate planning documents, amending them, and creating new ones where necessary. A will can be simple to set up and notarize. Beneficiary designations can be changed through deeds and other documents.

When necessary, more in-depth setups may allow for far more freedom, and protection – but whether they are relevant or necessary will depend on a vast array of circumstances and factors, including the size and “complexity” of the estate. Such tools and documents, including specialized trusts, can help minimize tax-related expenses, protect against creditors, avoid the lengthy and costly probate process, safely distribute overseas assets, and much more.

Remarrying/Recoupling and Estate Planning

A growing number of Americans have and are continuing to remarry, and many are cohabiting with partners before marriage. This can be a problem if existing estate plans are not amended, or if an estate plan does not exist yet. If you do have an estate plan in place and are planning to remarry or marry for the first time, consider a pre- or post-nuptial agreement, and discuss relevant estate planning details with your spouse, including (but not limiting to):

      • Joint estate and gift tax exemptions
      • Distribution of community and separate property

If you have children from a previous marriage and children with your new partner, consider alternative means of bequeathing assets and wealth transfer – such as giving lifetime gifts to your biological children, while making your stepchildren your heirs to the estate.

Why Wills Are Not Enough

You might want to consider including outside documentation in your estate plan, to ensure that the estate is distributed equitably and as per the decedent’s wishes. One consideration is to develop an estate plan that includes:

      • All relevant cohabitation agreements
      • Marriage documents
      • Divorce documents
      • Custody and separation agreements
      • And more

These documents are important to help ensure that complex finances and relationships are tracked properly, so a plan can be built to reflect your current thoughts and values – and avoid the kind of mistakes that could lead to costly litigation in years to come. Trusts can be a useful tool to help complex estates:

      • Avoid probate
      • Separate property and assets from yourself (and hold them in-trust through a reliable trustee)
      • Better control when and how assets are distributed after death (and most importantly, to whom)

Reevaluate Your Estate Plan Every Few Years

The biggest key piece of advice to anyone, regardless of their personal history, relationships, and family life, is to stay on top of your estate plan. This is not something you should set-and-forget, and choosing to do so can very easily invalidate the time and effort put into your estate plan, as it no longer reflects what you want and need. Consider sitting down and reviewing your estate plan and all relevant documents with a professional every three or so years, or immediately after a major life-altering event (marriage, divorce, birth, death, coupling, separation, etc).

Seek Professional Legal Assistance

An estate plan is not something you want to draft up on a whim, or without experience. An experienced legal professional will know best how US law favors traditional families, and what considerations other families must make when facing crucial estate planning questions. Consider contacting an experienced estate planning professional before you begin amending or drafting your modern estate planning documents.

Doing so will help ensure that you aren’t missing anything crucial, or wasting your time and money on something that could be done more efficiently, for your sake and your family’s sake. It is important to note that information in articles such as these is simply meant to convey general knowledge and inform readers on potential pitfalls and considerations. In-depth case-by-case information is far more valuable, and only available through legal counsel.

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