This just in: life and families are messy. “Messy” not only describes in many cases the relationships but also the finances of even some of the most successful families.
Factors which increase the “messiness” include size and complexity of assets as well as tangled family dynamics (ie: multiple marriages or children born outside marriage). A combination of significant assets with kids from multiple marriages begins to get quite complex...
To solve this complexity people generally know that at a minimum they need to have a will.
If you die without a will, your property is intestate. That means your property is disbursed according to the laws of your state. Assuming you’d like to control what happens to your assets at death instead of your state making that decision you’ll need to take some action.
Here are some good ideas of documents which will help your family reduce or eliminate the ‘mess” that your heirs and family might otherwise experience when you pass:
- Do a will – it's a start.
- Do a trust: protect assets and healthy family relationships. Identify how you want minor children to be raised and how to distribute assets to them to avoid them having money prior to maturity to deal with it. Make sure your kids will receive your estate even if your spouse gets remarried after your death.
- Do a living will and/or health care directive. In case you are incapacitated these will provide survivors who you trust to make health care decisions in your behalf.
The reality is that stuff happens that we could not even imagine in both families and finances. The best way to prepare for unknowns and life/death curve balls is to get estate planning work done which will protect, simplify and provide for your surviving family members. Like obtaining sufficient life insurance when your family is young and depends on you - it's one of the “adult” things which will only be appreciated once you are no longer there.