Maybe the reason the Emmy-winning show ‘Modern Family’ is such a hit isn’t because of the phenomenal writers on the show (although the writers are phenomenal), maybe it’s because the show is more relevant than we think. What if Claire and Phil; Ed and Gloria; Cameron and Mitchell, and all the kids in between were representative of majority of families in the U.S.? What would that mean for estate planning? News flash, they are the majority, and it makes estate planning extremely complicated.
A 2014 study done by Allianz reported that the traditional model family, that is: Dad, Mom and 2.5 kids, accounts for only 20% of families in the U.S. That means that 80% of U.S. families are modern families. Modern families include same-sex families, blended families, common-law families, single-parent families and any other variation. However, despite the fact that modern families are prevalent in the U.S., adequate estate planning that addresses the non-traditional nature is severely lacking.
Estate planning may be even more important in a modern family because there are more components to consider. For example, inheritance planning in blended families may be difficult due to strained relationships between step-children and step-parents. Retirement may be delayed because of more mouths to feed.A UBS study released last week showed that 70% of investors did not feel that there was adequate financial and estate planning advice available for the non-traditional family. The UBS study surveyed almost 3000 investors with a net-worth of at least $1 million in investable assets. Over 34% of those surveyed are in modern families, slightly under the 35% which accounted for traditional families. The remaining 31% surveyed were single or from child-free homes.
In addition to celebrating, same-sex households are also figuring out how the new inclusive legislation affects their families and what that would mean for their family’s financial future.
Estate planning is vital for the modern family. Casey Kasem and Robin Williams are just the more public examples of ugly scenarios that play out everyday in our firm and on the news. Modern families are complicated and to avoid disputes and bitter legal fights, we must consider the questions below. In the event of a death:
Who will be the executor?
Will everyone be treated fairly?
Will all family members be recognized as family in all jurisdictions
Will the wishes of the deceased be carried out?
The first line of defense is to work with a good estate planning attorney who will bring up touchy subjects that need to be addressed; plan for the unexpected, and provide a ‘global’ estate plan that will cover finances, investments and any other assets.