Estate Planning for the [television show] Modern Family
By: Barry E. Haimo, Esq.
May 12, 2014
Estate planning is about family, and every family is unique, dynamic and complex. The hit television show, Modern Family, teaches us quite a few estate planning lessons. The lead character, Jay Pritchett, is the family patriarch. He’s sixty years old and relatively wealthy. His family and his estate represent two extremely important estate planning urgencies.
First, his family dynamic is complex. He is married for the second time and has children from each marriage. His current wife is significantly younger than he is and has a minor child, Manny, from her prior marriage. Jay considers Manny his son but has not adopted him. This complex nature of spouses, children and pseudo-children represents complex estate planning issues. Why? Because the statute of the state in which you are a permanent resident decides who inherits your property, how they inherit the property, when they inherit it, and in what form they inherit it (outright). In this case, it’s very probable that Jay’s beneficiaries chosen by the state would be very different than if he were to decide for himself. One additional point to mention is that Jay’s current spouse would inherit most if not all of his estate outright. Without a control mechanism, there would be no way for Jay to ensure that his younger wife doesn’t remarry and share his wealth with her new husband instead of Jay’s children.
Second, Jay appears to be the owner of a successful business. Some of his children work in the business while others do not. How that business will transition in the event Jay becomes incapacitated or dies is unclear and very important. There are ways to ensure that control vests in the family members with experience in the particular business or at least business experience, while financial or economic interests pass to all children. The solution would be to utilize a business entity, such as a LLC, LP or corporation, and execute the proper governing documents and shareholder agreements.
In addition, Jay could engage in tax planning by gifting interests in his business to his family or creating defective grantor trusts to fund and then purchase his business interests from him. The end result is that he depletes his estate of the business interest, or severely discounts its value for estate tax purposes.
Jay should definitely have a Last Will and Testament, Power of Attorney, Health Care Surrogate and Living Will (a/k/a Advanced Care Directives) and probably a few business entities and one or more trusts. The bottom line is that television is not real but we can learn really important lessons from it. The article inspiring this post is found below by ZeekBeek.
Estate planning for “Modern Family”
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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