The world is a different place today than it was in 1950. Several decades ago the vast majority of families were of similar make-up: father, mother, kids, dog, house, and car. Inheritance planning in those situations often followed very predictable patterns. A spouse received the assets after a death, and the children split the remaining assets when the second parent moved on. However, our New York estate planning lawyers know that there is much more complexity these days.
That is true for several reasons. On one hand, the law has changed, with different tax situations, legal tools, long-term care concerns and other realities forcing estate plans to take more into account. In addition, families are much more diverse these days than in the past.
Blended families are quite common, necessitating families take special care to account for their inheritance wishes. “Default” statutory inheritance rules may have been a bit less off-putting several decades ago. However, considering the unique make-up of most families these days, it is incumbent upon local residents not to risk their estate being split via default intestacy rules. As a new USA Today story explains, it is no longer a luxury to have the help of an estate planning lawyer–it is a necessity.
The article reminds readers that complex family situations “are turning the already-prickly matter of inheritances into a gargantuan challenge.” Part of the cause is that many families are now filled with ex-spouses, stepchildren, grandkids, siblings who live thousands of miles apart, and many other components. Default rules of inheritance simply no longer fit. Plans need to be tailored to meet each case uniquely.
In addition, some adult children are finding themselves in tricky financial situations after counting on an inheritance than never comes. Some planners have noted that they’ve seen adult children dig themselves into financial holes expecting to be helped by an inheritance only to find that the inheritance is split differently than they expected. Also, on many occasions that overall inheritance is smaller because of changing healthcare needs. With seniors living longer and elder care costs rising, it is not difficult for a once robust family estate to be eaten up.
All of these pressures are making family inheritance feuds more common than ever. According to the latest Pew Research Center data, about 40% of Americans have at least one step-relative. New additions to the family heighten the tension of inheritance issues. Stories abound of step-children fighting with surviving step-parents, money passing to step-children instead of blood relatives, and similar dynamics. There is no one-size-fits-all piece of advice to avoid these situations. The only universal wisdom is to ensure that families meet with planning professionals early on–before a senior’s health deteriorates–so that some plan is in place when necessary.
See Our Related Blog Posts:
Now Remains a Good Time for Baby Boomers to Conduct Estate Planning
Estate Planning May Be A Family Decision