Addressing your blended LGBT family in your estate plan is a good idea. Though you may not wish to treat your Partner’s children the same way you treat your biological children, by at least mentioning them or giving them a small gift you may avoid hurt feelings and potential conflict.
When a client asks me about a small gift, I like to examine the client’s assets to find a way to make the gift without naming the recipient in the Will. Once you name a person in your Will, that person becomes part of the probate notification process and the entire probate. This can increase the time your executor must spend on your estate and the overall costs. It also raises the question of who will pay the New Jersey Estate and Inheritance Taxes due on the small gift.
If you have a life insurance policy, you can name your Partner’s children as beneficiary of any amount. The gift passes outside of probate, reducing the amount of work for your executor. The gift is also received quickly and your Partner’s children do not have to wait for the New Jersey estate to complete probate. An added advantage is that you can change the amount of your gift at any time without involving your New Jersey estate planning attorney by simply filing out a new beneficiary designation.
Other assets can be used to make these gifts, such as the beneficiary designations on your IRA or using a Transfer on Death designation on one of your bank or stock accounts. These accounts might create additional income tax issues, which you should consider with your New Jersey estate planning attorney.
If you have questions about LGBT estate planning or probate in New Jersey, feel free to contact our office for a free consultation.
Wills, Trusts and Estates, It’s all we do!
Peter Klenk, Esq