gtag('config', 'AW-1029898234');

By Ryan McNeill, Attorney at Law

Today’s definition of family in the US no longer automatically translates to a mother, father, and two-plus children. There are more single parents, couples living together, couples who have divorced and remarried, same sex couples, and grandparents raising their grandchildren. As often happens, the laws around estate planning have not necessarily caught up to reflect this new reality. In some cases, the laws that are on the books where you live may result in legal outcomes that are directly opposite your wishes.

It’s Complicated

It’s estimated that one-third of all marriages in the US today form stepfamilies. Couples who remarry once (or two or three times) may have children and stepchildren from each of those marriages. This can make creating an estate plan and naming beneficiaries complicated. Consider these situations:

• A couple is living together but they are not married. Without an estate plan or having named the other person as their beneficiary in their will, on bank accounts or retirement funds, the current laws in North Carolina will not recognize the surviving partner’s right to those assets. Instead, the assets would go to any children of the deceased individual first. If there are no children, they would generally be distributed – in this order – to parents, siblings, grandparents, or aunts and uncles.
• A couple gets married and it’s a second marriage for both. Both husband and wife have children from their first marriages, then have another child (or children) together. How should their assets be divided among their beneficiaries? This is a discussion that should be had before the couple marries. A prenuptial agreement is probably also a good idea if the intent is to preserve assets brought into the marriage for the benefit of the children of that person’s previous marriage.
• A couple is in a second marriage and one spouse prefers to name a step-child as executor or to serve as a health care decision-maker rather than his/her own child. In the absence of a legal will, trust or advanced directives, the law will likely include a preference for the “next of kin” as opposed to a non-family member you wish to serve in those decision-making or administrative roles.
• Who makes healthcare decisions if there is not a healthcare power of attorney? Or what if you become incapacitated and are not able to make financial decisions? Again, as relationships become more complex, it’s important to document who you want to make decisions on your behalf if you are unable to do so as the law still leans into biological next-of-kin for serving in those roles absent legal document appointing someone else.
• An individual prefers a name which does not match what is on their birth certificate, driver’s license or social security card. Documents should potentially reference as “aka” the name which would correspond with those government issued identifications to avoid confusion or an inability to utilize advanced directives, or efforts should be made to consider a legal name change and alignment of those various identifying government issued cards/licenses.
• Grandparents are increasingly tasked with raising their grandchildren. This brings an entirely different set of challenges. It is important that the grandparents have the legal right to make financial, health-care, and educational decisions on behalf of their grandchildren through guardianship or custody orders. If you are in this situation, we strongly encourage you to speak to a family law attorney.

Estate Planning “Musts”
There are a few estate planning guidelines we recommend for everyone:

  1. If you are a competent adult (age 18+), you should have an estate plan. Even if you don’t own property or have many assets, you should have advance directives, including a healthcare power of attorney to allow someone you trust to make healthcare decisions if you are unable to do so, and a simple will to name an executor to address any post-death matters which might arise. You never know when you might be incapacitated due to an accident or illness and unable to act in your own best interest.
  2. Your estate plan should be updated every time you experience a life change. This includes marriage, separation, divorce, the birth of a child, death of a loved one, marriage or divorce of a child who might inherit or be named to act under one of your documents, or any other major change. If you divorce and remarry but never change your estate plan, your ex could end up being your legal beneficiary or decision-maker.
  3. Consider a prenuptial agreement prior to remarriage or whether legal marriage is the right decision at all. It can be helpful to plan ahead, especially in cases of second or third marriages. Talking through what will happen with your assets in the event of death or divorce can help prevent family fights and hard feelings down the road.

Need help creating or updating your estate plan? Contact Brinkley Walser Stoner today to schedule an appointment with an estate planning attorney.