With the exception of my mother, my son has no interest in establishing any relationship with my family.
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Question: I’m a 71-year-old, retired, married man living in California. My wife is 67 and has two children from her prior marriage; I have one from mine. I’ve treated her children as if they are my own since our wedding 30 years ago. My child moved away from the U.S. with his mother 35 years ago, so understandably, my new wife has no relationship with him. My son knows I’m remarried through my ongoing relationship with him. But with the exception of my mother, my son has no interest in establishing any relationship with my family.
Do I need a financial adviser or estate planning attorney to help me fairly provide inheritance to my only son who lives overseas, in the event that I die before my wife does, which is expected? I would appreciate working with someone who charges their clients a reasonable rate.
Answer: Your estate planning question is very common for second marriages with children from first marriages — and you may want to consider a pro to help you with these issues. (You can use this free tool to get matched with a financial adviser who might meet your needs.)
“There are simple things you can do such as segregating an account with your son as primary beneficiary to more complex strategies such as establishing a trust to make sure your son is the ultimate beneficiary of accounts after your wife passes,” says certified financial planner James Daniel at The Advisory Firm.
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You should likely hire an estate planning attorney, and may also need a financial adviser. “For most people, a well-thought-out will or trust will accomplish what you’re asking,” says certified financial planner Anthony Ferreira at WorthPointe Wealth Management. Adds certified financial planner Jim Kinney at Financial Pathway Advisors, “Depending on your exact wishes, an attorney may recommend leaving your estate to a trust, which could take care of your wife’s needs while she is alive, then passing any remaining assets to your son.”
A financial adviser can help you make sure that your assets are titled in such a way that they make use of whatever planning tool the attorney has recommended. “This is very important, since retirement accounts, insurance policies and annuities that have named beneficiaries do not pass based on the terms of your will, but will pass directly to the named beneficiary. Not naming a proper beneficiary for such accounts is a very common and costly estate planning mistake,” says Kinney.
What’s more, “the financial adviser can help you get clear on your financial goals, considering the possible financial needs of your spouse should you pass and how you can take care of her needs while still leaving money for your child,” says Kinney.
Your situation isn’t simple and you’ll need to do some goal setting to map out exactly what you want your money to do once you’re gone. “Going through a general information or education session with an attorney can be expensive. Get the lay of the land from a planner first and head to the attorney second,” says certified financial planner Matt Bacon and Carmichael Hill & Associates.
For the best path forward, Bacon recommends seeking out a planning professional with a CFP (certified financial planner) or AEP (National Association of Estate Planners & Councils) designation. “The planner can help guide you as well as offer recommendations for how to reposition your balance sheet to best accomplish what you want. When you know what you want to do, head to the attorney’s office and have them draft up the documents to make it so,” says Bacon.
A good place to start your search is through the National Association of Personal Financial Advisors (NAPFA), the CFP Board and the FeeOnlyNetwork. (You can also use this free tool to get matched with a financial adviser who might meet your needs.)
It’s also important to ensure your financial adviser and estate planning attorney are working together to ensure nothing gets lost in the shuffle. “If you’re working with a financial professional that is managing your assets, you’ll also want to make sure that person receives a copy of the trust documents, if established. That way, the assets can be retitled to the trust ownership. The biggest mistake people make is creating a trust but neglecting to fund it,” says certified financial planner Ryan Haiss at Flynn Zito Capital Management.
Have an issue with your financial planner or looking for a new one? Email picks@marketwatch.com.
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