familyDinnerOne of the most popular shows on TV today is Modern Family. As you know, Modern Family is a about an extended, non traditional family and their interactions. While it is a sitcom, the new non-traditional family is anything but a make believe TV show.

I am defining traditional family as a husband (man) and wife (woman), legally married and their biological children. Non-traditional may be same-sex marriage or unmarried couples living together. Children may be the biological product of both parent, one parent or adopted.

Estate planning for the modern family can get challenging. Simple estate elections such as per stirpes may get interesting results. Per stirpes is a legal term or a legal stipulation that states if a beneficiary pre-deceases a grantor that their share of an inheritance will be divided equally among those of his or her lineage.

Example, Chuck (age 70) names his three adult kids: Samuel (age 48), Sandy (age 46) and Kevin (age 41), equally as beneficiaries on his 401(k) and checks a per stirpes box on the beneficiary form. When Chuck dies, his kids will each get a third. Now, let’s suppose one of Chucks kids, Samuel, dies before he does.  His per stirpes stipulation will ensure that Samuel’s children will get Samuel’s third.  The polar opposite of per stirpes is per capita. If this case had gone down the per capita path, Samuel’s children would have been disinherited. Sandy and Kevin would split Samuel’s share.

Now let’s suppose Samuel is part of a modern family. He has lived with a lady friend for over 25 years, but they never married. He has had five kids under his roof. Two are his partners from a previous marriage, one is his from a prior relationship and two are from his current relationship. Is Samuel the legal parent of all the kids? Everyone has been afraid to ask, so no one really knows? Will a per stirpes designation be a good idea? We don’t know. Chuck may want to think twice on this one without some further exploration.

Modern family or blended families will increase legal challenges to per stirpes stipulations.  If your intended heirs are part of a modern family, pay careful attention to a per stirpes designation.

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