Estate planning is not one size fits all. That said, there are estate planning goals which occur frequently in certain family situations.  Let us consider how estates are distributed in these various family situations.

Consider a married couple of thirty years with three children together all of whom are doing well. The parents’ assets were acquired during their marriage together and purchased with marital earnings.  Here, almost always, the couple will choose to leave everything to the surviving spouse and then, after the surviving spouse dies, all equally amongst their surviving children.

However, with a blended family, particularly where one or both spouses have significant separate property assets and separate children, then the distributions are typically different. Unless both spouses raised each other’s children together from an early age, the husband and wife are likely to want to leave more to their own children from their share of the estate.  That said, each spouse is unlikely to want to leave all of their separate property assets entirely outright to the surviving spouse.  What makes sense depends on the size of each spouse’s estate.

A well off spouse may choose to leave some assets to his or her surviving spouse so that the surviving spouse is able to live, while leaving the other assets to his or her children, who will not have to wait for the death of their step parent. This eases the tension when step children are anxious about receiving their delayed inheritances.  The surviving spouse and the step children can go their separate ways.

In other blended families, where there are more limited assets, the surviving spouse may receive a life estate in a residence and most all of the deceased spouse’s financial assets. When the surviving spouse dies, the residence (or the proceeds from its sale) will go to the children.  If the couple have a child together, that child will often receive a larger share of the estate.  The half-brothers and half-sisters, after all, will usually also inherit from the estate of their other biological parent.

Consider a middle class couple who have three children, one of whom has special needs and receives SSI and Medi-Cal, and two of whom are self supporting. In that case, the parents often want to ensure that the special needs child has the necessary resources to live after the parents are gone.  They are less likely to make an equal division of their estate if doing so would jeopardize the well being of their special needs child.  When the special need child lives at the parents’ home, the parents may choose to make a specific gift of their residence and financial assets to a special needs trust for that child; later, upon the death of the special needs child, that trust would distribute the unused assets to the couple’s then surviving children and/or grandchildren.  The parents’ remaining assets, especially items of sentimental personal property, will be divided equally between their other two children.

Consider a couple with one or more estranged children. These parents often choose to disinherit those children with whom they have had no continuing relationship.  Doing so may sometimes complicate the lives of the other child(ren) who will have to deal with their upset siblings.  Typically, however, the disinherited child(ren) also have no further relationship with their siblings either, so it usually doesn’t matter that much.

As we can see, what is a fair distribution for some families is oftentimes not an equal distribution. What is fair all depends on that family’s own circumstances.

“Serving Lake and Mendocino Counties for nineteen years, the Law Office of Dennis Fordham focuses on legacy and estate planning, trust and probate administration, and special needs planning. We are here for you. 870 South Main Street Lakeport, California 95453-4801. Phone: 707-263-3235.”