Families can be complicated.

A 2015 study by Pew Research Center found although 73 percent of families in the 1960s consisted of two parents in a single marriage, by 2014, two parent families in their first marriage comprised only 46 percent of American families. Today, family units may be comprised of traditional two-parent families with common children, two-parent blended families, single parents, cohabiting parents and even non-parent adults raising children.

Estate planning must be tailored carefully to meet the needs of a nontraditional family. The plan must include considerations for custody and guardianship if children are involved, financial provision (often through a life insurance policy) and tax implications.

Consider, for example, a cohabiting couple with no children. This couple may be tempted to simply leave all property to each other, then have separate successor beneficiaries. There are a couple of implications of this plan, however.

First, because the couple is unmarried, the survivor of the two will be considered a Class C beneficiary under Kentucky’s inheritance tax statutes and will pay the highest tax on the inherited property. Second, only the survivor’s beneficiary choices will be honored. Further, even if the survivor includes the decedent’s beneficiaries in his or her own plan, when property passes upon the survivor’s death, it likely will be taxed again at the highest tax rate.

A blended family may have similar concerns, but with less concern for tax liabilities. Parents within a blended family can leave property to one another without triggering the Kentucky inheritance tax.

However, the beneficiary issue often becomes significant after the first parent’s death, particularly where spouses leave all assets to one another, with children as successor beneficiaries.

The children of the decedent may not continue a close relationship with the stepparent after their parent is gone, leading the stepparent to eventually remove the children from his or her own last will and testament. This effectively cuts the children off from receiving even their own parent’s property.

Single parents usually are not as concerned about the ultimate disposition of property, but are highly concerned about custody of children and control of property left to children. Particularly for single parents with strained relationships with the other parent, vague provisions for child beneficiaries likely will allow the surviving parent to take possession of the child as well as control over the child’s finances.

Statutes regarding estate planning offer good solutions for all of these issues, but the plan must be crafted to the individual facts.

Unmarried couples may choose to use nontaxable devices to partner beneficiaries in order to mitigate tax liabilities or simply may choose to marry in order to avoid taxes altogether.

Blended families could use a simple revocable trust with a marital split option. This would “lock” a fraction of the trust upon the first spouse’s death, allowing the surviving spouse to continue to use assets in the “locked” side to pay living expenses, but preventing a change of beneficiaries.

Single parents could use a revocable living trust that would have specific provisions for who may serve as trustee and who may not serve as trustee after the parent’s death. The trust would bypass probate, allowing for uninterrupted support to minor beneficiaries and would serve as a recipient for life insurance and other payable-on-death proceeds.

Pablo Picasso wrote, “Only put off until tomorrow what you are willing to die having left undone.”

Preventing problems is almost always less expensive and emotionally costly than attempting to fix legal or tax issues later. Preparing a solid estate plan in advance can protect the people you love later.

Cynthia Griffin is an elder law and estate planning attorney at Burnett and Griffin PLLC in Elizabethtown. She can be reached at cynthia@bcglawcenter.com.

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