Who Is That Man Behind the Curtain?
After nearly 30 years as an estate planning attorney, I'm starting to feel like I live in the land of Oz! I've seen Federal Estate Tax exemption rise from $600,000 to $5,430,000. Thirty years ago the definition of family seemed pretty straight forward-from the Waltons to the Brady Bunch to the Bunkers the concept of "family" although unique, had some consistency. Today the definition of family has become more complicated. We are clearly not in Kansas anymore.
A recent report by UBS quantifies some of the changes in family structure. The report reveals that only 35% of the high-net-worth investors live in the traditional family. In fact, 31% of the high-net-worth investors were either single or lived as heterosexual couples without children. The new "modern family" includes blended ones (i.e. children from prior relationships), same sex couples and homes shared by parents and adult children.
What does this mean for an estate planning attorney? This means that we must stay in tune with the changing dynamics of the modern American family. The estate planning is more difficult because, in part, the blended families have more options (i.e. complexity) in dividing up their estate when compared to the traditional families. The report states that 31% of the investors in blended families reported conflicts among potential heirs compared to just 12% conflict with the traditional families. That alone should be a strong incentive to get an estate plan in place. The report goes on to state, "planning for same-sex couples becomes increasingly complicated in terms of estate planning."
Not only does the modern family have more complex division and allocation issues, but the cost to support and raise the blended family is almost always greater than the cost to raise and support the traditional family.
Although the estate taxation has become less problematic for most of our clients, the family dynamics of blended families and same sex couples has made the planning more important than ever. Rest assured that all the attorneys are well versed on the myriad of estate planning options available to the "modern family." We are all well connected to that man behind the curtain.