Married Couples with Children
of a Prior Marriage are a BIG
New Market Niche!
(If you know how to plan for them properly and avoid malpractice!)
Most estate planning forms and techniques were developed when couples enjoyed long-term marriages with one set of kids.
But today’s reality is totally different. The U.S. Census Bureau estimates some 43% of marriages are second marriages, and over 66% of those involve children from prior marriages. That’s a lot of “blended” or “mixed” families who need your estate planning help!
The number of blended families poses a great challenge for estate planners. You better know how to properly advise these clients, so you protect both the rights of the surviving spouse and kids of the prior marriage - - or you risk being later caught in the crossfire of World War III! (Because another development you have probably noticed over the past few years is the increased willingness of the surviving spouse and disgruntled children of the deceased spouse to “lawyer-up”!)
The Pandora’s box of subtle and not-so-subtle tax and non-tax issues that estate planning for these blended families presents is something that has not been adequately addressed in your law school, CE classes or form books! There’s potential liability for you, the estate planner, that can arise at every stage of your engagement, including but not limited to:
- Advising a Couple with Conflicting Goals. How do you engage them both and avoid attack for breaching your ethical duties?
- Designing the Estate Plan. “QTIP” Trusts aren’t the quick and easy solution. In fact, they’re often part of the problem! And how do you deal with IRAs and other assets that can underfund the first-to-die’s estate tax exemption? How do you use “portability” and allocate the tax burden at the second death? Who should be the Trustee doing this? What kinds of lifetime transfers should take place to avoid problems after death? And on and on…
- Administering the Plan After Death. Who do you represent and owe an ethical and legal duty to, particularly with the added issue now of portability? The surviving spouse? The Trustee? The beneficiaries? How do assets get allocated to the Exemption or QTIP Trusts without a fight? What about subsequent sub-Trust investments and discretionary distributions? And what about accountings? And on and on…
Don’t navigate the mine field of blended family planning without first having an experienced guide walk you through it!
We have enlisted the help of two of the nation’s leading experts in this field - - estate planning attorney, L. Paul Hood, Jr. and Money Coach, Emily Bouchard - - co-authors of the book, Estate Planning for the Blended Family. Together, the two of them put together an updated 3-part series entitled, “Estate Planning for the Modern Blended Family”, to alert you to the blended family traps and liabilities (and, more importantly, how to avoid them).
Session 1: Sorting Through the Key Issues of the Initial Consultation & Successfully Engaging the Married Couple with a Blended Family
Duration: 90 Minutes
- The tax and non-tax reasons blended family estate plans often fail and how to define and explain these key risks to the clients
- Should you advise partners separately or together and what kinds of “sign-offs” do you need?
- How do you address the emotionally charged issues and fears that keep the planning process from moving forward - - and the documents from eventually being signed?
- What to do when a client shuts down or shuts you out?
- What strategies can you use when tempers flare?
- How do you properly prepare the client (and yourself) for the meeting?
- How do you address and solve specific property ownership and distribution issues including…?
- Pre-nuptial agreements
- Prior divorce obligations
- Community property, co-ownership and commingling
- Family home and living arrangements
- Family business complexities (Buy-Sell and Operating Agreements)
- Assets that pass by beneficiary (insurance, qualified retirement plans and IRAs)
- Family heirlooms and keepsakes
- Who should be considered for what roles?
- Trustees of revocable and irrevocable trusts
- Beneficiary designations
- Health Care Powers of Attorney
- Living Wills
- How do you get the couple to engage you and move forward?
Session 2: Lifetime Estate Planning for Blended Families
Duration: 90 Minutes
- Why is lifetime planning of greater importance to blended family couples?
- How do you properly use life insurance?
- Why and how should you do gifting?
- Severing joint tenancy
- Annual gifts (and to whom)?
- Equalization strategies
- Gift splitting
- How do you evaluate and custom-fit the various gifting vehicles to the client?
- Lifetime QTIP Trusts
- CRTs & CLTs
- Charitable Gift Annuities
- Family Limited Entities (FLPs, LLCs, etc.)
- Sales to IDGTs
- Defined Value Gifts
- Below-market Loans
- Opportunity Shifting
Session 3: Testamentary Planning and Administration for Blended Families
Duration: 90 Minutes
- Who should serve as Executor and Successor Trustee of the Living Trust?
- Surviving spouse?
- Children of the deceased spouse?
- Independent professional trustee?
- Some combination?
- What about when the surviving spouse dies?
- The right and wrong ways to go about equalization between the husband’s half and wife’s half of the estate
- QTIP Trusts - - A Blessing or a Curse?
- Carefully customizing Powers of Appointment
- Disinheriting family members and protecting the plan with In Terrorem Clauses
- Retooling your standard tax allocation clauses
- Who do you represent in the administration process and what duties do you owe, such as disclosures and accountings, to the non-represented parties?
- How do you allocate assets between Survivor’s, Exemption and Marital Trusts at first death, without a fight?
- How do you deal with issues of subsequent investment of the sub-trusts’ assets and discretionary distributions from those trusts?
- How do you apportion and collect estate taxes at the second death?
As you can see, this 3-part training series is going to be packed with a wealth of knowledge as well as BONUS Sample Forms (including Durable Power of Attorney and Marriage Contract) and four additional pages of Supplemental Materials. We trust that you will find this training immeasurably valuable whether you’re a CPA, financial advisor, insurance agent or an estate planning attorney - - and regardless of your level of experience and expertise in this area of planning - - if only to provide you with a must-have resource to walk you through the issues and solutions when you meet with blended family couples!