Estate Planning for Unique Family Situations

It may be best to think about estate planning as more of a process than a destination. While families may have an idea of how they want their assets distributed at death, changing circumstances can necessitate making changes to even the best laid plans.

For this reason, families are urged to review their estate plans whenever they experience a life-changing event such as marriage, death of a family member, changing career and retirement to name a few. Short of a dramatic change in the family make-up, it makes sense to revisit estate planning documents annually for a cursory review and at least every five years for a more detailed review and to possibly make revisions.  These types of meetings often generate ideas that can then be implemented.

As people live longer and family connections become more complex, the need to review and update estate planning documents becomes even more crucial so that there is no confusion in times of stress.

Below are some instances where extra care in estate planning may be warranted.

Second Marriages: Stepkids and New Kids
Merging to create a new family will surely necessitate an update to estate planning documents. Individuals will likely want to make sure the proper beneficiaries are updated on their financial accounts as well as updating any healthcare directives and powers of attorney to include the new spouse, if that is what is desired. Wills and other estate planning documents will also need to be updated to account for any children from the first marriage, stepkids and new kids from the marriage.

Families with a Special Needs Child
Families who have a special needs child may find themselves frequently revising their financial plan as their child’s needs change. Establishing a special needs trust can be an important first step in financial planning as the trust will protect the beneficiary’s assets so that they can still qualify for government programs. Parents of special needs children will also want to establish plans for caring for their children when they are no longer able to do so. This can include designating caretakers and structuring insurance to meet the needs of the child as they develop.

Remembering Furry Family Members
Ever since Leona Helmsley left a $12 million pet trust for her dog Trouble, pet trusts have become a regular financial planning tool. The trust should cover the costs of caring for the pet during their life and may also leave a stipend for the pet’s caretakers. It is also important that the trust clearly identify the pet to mitigate the risk of fraud. A pet trust will also contain specific instructions for caring for the pet and may require that the trustee periodically visit the pet to ensure their well-being.

Creating estate plans that achieve desired goals, especially when unique family circumstances are at play, requires careful structuring taking into account the applicable laws and available strategies as well as how to best leverage them. For more information, contact your Anchin relationship partner or E. Richard Baum, a Partner in Anchin Private Client, at 212.840.3456 or [email protected].