The families of today are not the families of the past. Blended and single-parent families that stood out conspicuously just a few decades ago are now mainstream. This is especially true for millennials, many of whom grew up with and in nontraditional households.

Whenever one thing changes, it has an impact on others. In this case, the increased appearance of nontraditional families necessitates increased attention to basic estate planning. While paying attention to this often-overlooked topic has always been important, blended and single-parent households make it even more so.

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Consider two cases that would have traditionally been rare, but are common today. First, a single parent has specific wishes about who would bring up her children should she die. The estate planning done prior such an unfortunate event will be the major factor in whether or not her wishes are carried out.

Also consider a blended family. The father has children from a previous relationship, and he and his wife have children together. Both parents consider all of the children theirs and want them to share any inheritance equally.

But the wife has not legally adopted the husband’s children, and her will leaves her considerable assets to her children alone. These scenarios are not far-fetched. They are daily occurrences in America today.

Traditional households are not immune to problems in this arena, either. Couples often can’t agree on who would become their children’s guardian should they both die, so they make no plans. Or worse, they agree and yet do nothing.

There are a couple of basic estate planning tools and concepts that millennials should understand, whether or not they are parents.

What Is a Will?

A will is simply a legal document that makes sure your wishes are carried out after your death. It allows you to choose who executes your estate and specifies the distribution of your probate estate. Your probate estate is the assets you own, with a couple of caveats that we will go over momentarily.

Note that in specifying who the inheritors will be, you can also specify who they won’t be. Sometimes that’s important, too!

You can also do any gifting you chose to through your will. And you can specify who you would like the guardian of your minor children to be, as well as who you would like their custodian to be. They are not the same thing. Sometimes you may want to have different people performing these jobs, sometimes not.

A will also reduces the likelihood of further legal complications after an untimely demise.

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The Caveats

Not all of your assets pass by operation of law through your will. For example, most retirement accounts name a beneficiary, and by law the proceeds of these accounts pass to the beneficiary. It doesn’t matter if you wrote 20 pages of wishes for these assets in your will, if the account named someone as the beneficiary, that person gets the proceeds. You could, however, name your estate as the beneficiary. Then the account would pass through and be distributed by your will. However, this is generally not a good idea.

Assets that pass outside your will are distributed quickly and are not subject to the cost of probate. Assets that pass through your will go through the probate court process. As you can imagine, that’s not speedy. Additionally, some beneficiaries can maintain a retirement account’s preferential tax status or receive other preferential tax treatment that your will cannot provide. Joint tenancy accounts also pass outside your will to the survivor.

Additionally, many banks and investment firms can provide a payable-on-death (POD) designation for your nonqualified investment and bank accounts. Depending on your situation, it’s not uncommon for a POD designation to save thousands of dollars in probate costs and distribute the assets to your heirs many months sooner. No downside there. PODs are not available in all states, but to take advantage of them, you can place your accounts with a firm in a state where they are offered.

What Are Guardians and Custodians?

The guardian of your minor child or children acts as a substitute parent until those minors reach the age of majority — that is, when they are legally considered adults.

Meanwhile, your children’s custodian is the caretaker of their assets until they reach the age of majority. In most states, minor children cannot be legally responsible for investment assets and must have a custodian for those assets until they reach the age of majority.

Guardianship is pretty straightforward: A guardian or guardians will raise your children, hopefully doing the job as you would have. But custodianship is more complex. It's not uncommon for a couple to pass along a significant amount of money that is ultimately for the child’s benefit.

It makes a lot of sense to separate the money job from the child-raising job. Doing so removes a host of potential problems from the equation.

And in my opinion, it is fairer to the guardians, who then are not also burdened with keeping your children’s assets separate from their children’s, as well as with managing the assets for their long-term benefit. Raising children and raising assets require different skill sets.

But it gets a wee bit more complicated. You have those pesky states and courts.

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Custodians, Courts, and UTMA Accounts

Say you do everything by the book, setting up a will and naming a guardian and a custodian. That can make it right without making it easy. Depending on how the assets are passed, the custodian can be left in the difficult position of getting court approval to use your children’s assets for their benefit. That does not sound like a fun job to leave someone.

Enter the Uniform Transfers to Minors Act (UTMA), which is a godsend for custodians. Under the UTMA, assets left as beneficiary can be used by the custodian for the child’s benefit until the child reaches the age of majority, at which time the child becomes the sole owner of the assets. Using a UTMA account can greatly simplify the process of the custodian obtaining funds to be used for your child’s benefit.

Special Needs

Not every situation is simple. Sometimes a child will need assistance past his or her age of majority, and it may be appropriate to establish mechanisms beyond a will to accomplish this. For example, the situation may call for a special needs trust or another vehicle designed to carry out your wishes and provide the appropriate care and/or resources for your child. In such a case, it behooves you to contact an appropriately qualified lawyer to review your options and establish the best program for your needs.

Making a Will When You’re Single

Being single doesn’t necessarily mean being irresponsible. Many single people are homeowners and often have other assets they wish to have distributed in a specific fashion after their death. Dying intestate — that is, without a will — is not a solid estate planning option. In the event that you do die intestate, your assets will be distributed according to the laws of your state of residence.

This may not be an issue for you. But if you have a home, a car, a boat, a motorcycle, or any other assets you want to see go to a particular person, you should consider making a will.

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Next Steps in Estate Planning

Every year in the United States, a large number of ex-spouses receive the surprise gift of retirement assets from a hated former spouse who failed to update their beneficiary designations.

The first thing to do is to know what you have. Check on who your beneficiaries are and if that designation is still appropriate. You should also always have a contingent beneficiary named in case your first beneficiary dies before you.

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Deciding what you would like to have happen in the event of your premature death is not necessarily easy or pleasant, but it may be extremely important. The guardian and custodian for your children can be chosen by you in advance or assigned by the state. That’s plan B. That’s what happens if you didn’t do what you should have done.

If your situation is simple, you may want to purchase a will kit and go the do-it-yourself route. You may wish to consult an attorney. If your situation involves considerable complexity, you may consider using an estate attorney. Either way, do your homework and move forward.

Wills can be changed. Beneficiary designations can be changed. Don’t let fear of doing the wrong thing prevent you from doing the right thing. Take the action that seems like the best decision in the present. If conditions change, you can have your will or other documents updated. Failing to act is still a decision, but not one that will carry out your wishes.

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