California families in which there are stepchildren, adopted children, cohabiting unmarried adults, single parents and other nontraditional configurations may find that traditional estate planning advice does not cover their situation. Even trusts, which can be used in a number of complex situations, might need some provisions and adjustments.
With a traditional trust, there is generally a beneficiary who receives income from it until death. At that point, the remainder passes to another beneficiary. A more useful arrangement might be a flexible schedule with an institutional trustee who has the discretion to make distributions.
One potential problem with trusts is that they can be difficult to change. This could be the case even when the way the trust is written or a change in circumstances mean the trust does not reflect the settlor’s original intentions. With a decanting provision, these changes can be made if necessary because the trust can be rolled into a new one.
Different families have different needs and communication styles. This is another factor that should be taken into account during estate planning. This type of planning might be a group process, with family meetings. Others may benefit from one-on-one meetings with financial advisers.
Estate planning can be a difficult process, but it is important for all adults. An attorney may be able to assist a client in making a decision about the best structure for the estate plan given family dynamics and needs. This might mean using a will instead of a trust in some cases. People should also make sure their estate planning documents are consistent with any beneficiary designations they have completed for retirement accounts or other assets. These are often overlooked, and they override wills and trusts. It is important that they reflect the current family situation and the intentions of the estate plan.
