For those unfamiliar with the lingo, a “Baby Mama” refers to the mother of an unwed man’s children and “Baby Daddy” refers to the father of an unwed woman’s children. Estate planning can be difficult in second marriages, particularly when spouses have children from prior relationships. Once the planners determine how their assets should be divided among their own children, they must determine what happens to assets if any of their children predecease them. Generally, that child’s inheritance will go to his children, the grandchildren. The effect of this inheritance line could be significant and, if not adequately contemplated, could undermine the estate planners’ intent!
Frequently, personal property is inherited through either a letter to Trustee or some sort of lottery system created in the trust or will. However, if the named beneficiary predeceases you, it is important to determine whether the item will go to one of your other children or whether it should descend to one of your grandchildren. You may want to consider how involved your child was in your grandchild’s life, the grandchild’s age, and the grandchild’s other parent. If your default provision is that items descend down the family lineage, you could end up giving treasured items to a child who can’t appreciate their value.
Particularly in cases where the grandchildren are minors, it is also important to determine who will be the trustee over assets the grandchildren inherit. It may be the Successor Trustee you have chosen for the rest of your trust administration. The successor could be the grandchild’s other parent. You may even choose to appoint an independent third party, such as a financial institution or professional fiduciary. The answer could depend on how closely your family associated with the child and the child’s parent and on how much you trust the parent. In cases where your grandchildren have more than one unshared parent, the answer may also depend on your distribution provisions and how the property ought to be retained in trust.
Finally, it is wise to consider whether you would like the other parent to inherit anything. Even though the remote beneficiaries rarely inherit, in cases where a trust may be in existence for a significant amount of time, determining whether an inheritance might outlive a grandchild is important. Often, the last beneficiary’s estate may receive the final distribution. In cases of a minor, the other parent or even your grandchild’s other siblings who bear no relation to you, could inherit the share of trust assets designated for your grandchild!
When your child has children from prior marriages or out of wedlock, it is important you receive competent and complete advice on your estate plan. When meeting with your attorney to plan or review, discuss the role your grandchildren should play in your estate plan and what role, if any, the Baby Mama or Baby Daddy should play in receiving or managing any assets!
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