Estate planning for blended families can become complicated, but neglecting to plan in advance can lead to unhappy outcomes for the entire family. The Fairfield Bay News in “Estate Planning Tips for Blended Families” advises speaking with a qualified estate planning attorney, preferably one who has worked with blended families and understands the challenges that can arise.
Here are a few general ideas to help you think about planning for your blended family:
Update Beneficiary Designations. Get all of your beneficiaries set and updated, such as those on your retirement accounts and insurance policies. This will ensure they reflect your blended family as well as your estate plan. It’s important to remember that these designations take priority over any instructions in your estate plan, such as in your will or a trust—it’s a totally separate deal.
Living Trust. While you’re at it, consider who should be trustee of your living trust. Trusts help you to avoid probate and allow you the freedom to determine how and when your assets are distributed. After you pass away, a properly created—and “funded”—trust can provide a surviving spouse with income for life. After he or she dies, it can then give the children from an earlier marriage the remainder of the trust assets.
You should also ensure the trust is properly “funded.” That means ensuring any assets to be distributed or held by the trust are in the name of the trust. That requires working with your financial institutions to ensure everything is correctly aligned not only now, but remains in alignment over time. An estate planning attorney with an ongoing client care program—like Family Estate Planning Law Group’s—can help ensure your assets are aligned with your plan over time.
Prenuptial Agreement. When settling an estate, a prenuptial agreement can help eliminate disputes among members in a blended family. With a pre-nup, you can detail a separation of property for any relevant estate planning arrangements. In the event that you and your new spouse agree to keep your assets separate, that could help you each pass an inheritance on to your own children.
Family Meeting. Don’t neglect to have frank conversations about your estate plan and your intentions with everyone in the family. In most cases, you’ve invested a lot of time and effort to successfully blend a family. It would be a shame to undo a family, blended or otherwise, because of misunderstandings or resentments over the estate.
That’s why at Family Estate Planning Law Group, we encourage our clients to hold a Family Care Meeting to outline your planning and wishes to your loved ones, especially those with a fiduciary role in the estate plan. Our clients often find that it helps heirs to hear about the estate plan and any provisions for incapacity before a crisis occurs. Loved ones with a role to play get a better understanding of their responsibilities and the client has the opportunity to express their wishes directly.
For more information about the importance of aligning, verifying and tracking assets, or for more about our Family Care Meeting, explore our website and contact us to schedule your consultation today!
Reference: Fairfield Bay (AR) News (November 9, 2016) “Estate Planning Tips for Blended Families”