Blended Families’ Estate Planning

Wednesday, July 22nd, 2009

Richard Barnes witnessed the negative effects of a poor estate planning.  The families are upset, frustrated, and confused - they are forever shattered by it.

Even more confusing are those people in blended families - those families formed from second or third marriages - these are more difficult and precarious situations.  Barnes said that there are no instruction manuals for second marriages, and this time, you need to deal with new in-laws and step-children.

Amidst a larger cast of individuals, renewed estate planning could clarify your wishes.  This renewed estate planning could purchase additional life insurance, update a will dealing with prior relationships and reflect the current dynamics of new ones, etc.  Therefore, you need to learn various things such as dealing with heirlooms, how to select the best lawyer, etc.

Barnes further added, “It’s not just another marriage.  Somehow, it would seem that there are numerous challenges and geometric progression of personalities from first to second marriages.  There is a large amount of emotional issues surrounding people in second marriages.  And if clients would not think of these things (especially what to do with the properties and estate), there would be adversarial impact.  Only planning ahead would make it right.”

Tags: blended families, Estate Planning, lawyer, marriage, Richard Barnes, second marriage
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Alternative Lifestyles Estate Planning

Wednesday, June 24th, 2009

When you say “alternative lifestyle,” it encompasses anything except a legal union of man and woman as a husband and a wife.  But whether you know how to use this term or not, estate planning’s surrounding laws are still predicated on specific family structure.  In many cases, that family structure doesn’t exist, that’s why particular attention needs to be given to estate planning.

For instance, the existing federal estate tax system is allowing unlimited marital deduction coming from estate taxes.  Simply put, even if you’re as rich as Bill Gates, there’s no federal estate tax when you leave all your money to your surviving spouse.

Because federal definition of marriage says that “it’s a legal union between a man and a woman as one husband and wife,” you need to make a different planning technique because unlimited marital deduction isn’t available to you.

Moreover, state and federal laws have default provisions and there are certain rights granted automatically to a spouse.  So if you don’t have a spouse, no one will have those automatic rights.

Estate planning may be difficult for many people.  However, you need to take a very active role to determine your estate plan so that you can make the decision to pass on your estate to the right person when you’re gone.  It’s best to seek the help of estate planning attorneys to assist you.

Tags: alternative lifestyle, attorneys, Estate Planning, Estate planning attorneys, federal estate tax system, marriage
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Prenuptial Agreements may be a Smart Move

Monday, June 8th, 2009

A prenuptial agreement spells out the rights of each party and the assets that they are bringing into the marriage. Having this before a wedding may lessen the incidence of a messy divorce.

Since 40% of marriages usually end in divorce (based on Census data), it would be worth considering a prenup especially for people with significant assets, no matter how uncomfortable it sounds.

But before you draft this agreement, find out if a prenup makes sense for you by answering these questions:

1. Is it for me? – Prenups protect people at all kinds of income levels. They’re not just for the rich.

2. How much will I pay? – The cost would probably be a thousand dollars or more. Some attorneys may charge $1,500 to draw the document either for an hourly rate or a flat fee.

3. What does it cover? – A prenup’s objective is to sort out “who will own what” in case of a divorce as well as what debts or properties must be shared in marriage.

4. What should not be covered? – You can’t waive away children’s rights. However, you could state how the child must be raised.

5. How often should it be updated? – It is a good idea to update your prenup when there are significant changes in your situation or events such as career change, inheritance, or birth of a child.

Tags: attorneys, Census, Divorce, marriage, prenup, prenuptial agreement
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