Perhaps you have a complex family situation. For example, you might have a second spouse and stepchildren plus children from your first marriage, one of whom has special needs. You have a primary residence and a vacation home, investments, retirement accounts and a good income.
Now you are thinking about your will and how you should distribute your assets. Not everyone will be happy about their inheritance, and you are wise enough to know there is potential here for a family feud. Your best move is to head off a dispute before it even has a chance to begin.
Identify the priorities
Your first priority is your special needs child, followed by your spouse and the other children. Working with an estate planning attorney, you can set up a special needs trust for the child from your previous marriage and take that concern off your to-do list. Among other benefits, the trust will ensure the child will remain eligible for Medicaid as well as Supplemental Security Income.
Charitable giving
You also want to include a significant charitable bequest to your church. This may come as a surprise to your children, and you sense it could cause some grumbling. However, you might consider using your retirement assets for the purpose of charitable giving. For one thing, the government will not require the church to pay income taxes on the donation. In addition, you will reduce the amount of estate tax your family will have to pay because this kind of donation makes your estate eligible for an estate tax charitable deduction based on the value of your account.
Fair, not necessarily equal
Every circumstance is unique. In addition to your special needs child, you have a child about to start college and stepchildren who are going through the difficult adolescent years. Your wife has a part-time job in real estate. You want everyone to benefit as your heirs, but you realize they will not benefit equally. Your attorney can guide you when the time comes for you to discuss your intentions with your family members. An open conversation now is the best way to diffuse arguments and hurt feelings that could result after you are gone.
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