One issue that arises is that of a “spendthrift” child or grandchild. This family member may have an addiction problem or may simply be poor at money management. Whatever the reason, careful planning can allow that loved one to still receive an inheritance, while also structuring that distribution in a way that gives him or her the best chance of succeeding.
Also, some seniors still have dependent children at home. Many of those children are adults with special needs and likely receive government assistance. It is of paramount importance that these families engage in estate planning. In some cases, that special-needs child’s direct receipt of a large sum of money could disqualify them from continued receipt of their benefits.
Given the high cost of caring for people with special needs, this could ultimately result in the child losing their inheritance, entirely consumed by uncovered costs of care. With appropriate planning though, that child’s distribution can be placed in trust for him or her, and he or she can still receive the benefits of both his/her government assistance and inheritance.
Another issue is “informal” relationships. State intestacy laws (which will rule what happens to your assets if you have no plan or your plan is otherwise found to be invalid) were enacted in a time when households were more “I Love Lucy” and “Ozzie and Harriet” than “Modern Family” and “Will and Grace.”
However, today, many couples and other family members have “informal” relationships that are not formalized under current law. Under the law these partners are usually treated the same as any two unrelated people. Well thought out estate plans can be vital to meeting these couples’ needs, especially in circumstances where one or both partners’ families disapprove of the relationship. This is true both for purposes of distributing assets upon death and ensuring that the other partner can make decisions on the partner’s behalf in the event of incapacity.