Blending two different families is always challenging, but it can be especially so when it comes to estate planning. Blended families are complex by nature; you may have children from a previous marriage, children from your current marriage, as well as step children from your new spouse’s family.
How do you divide up your estate?
The most complicated part of estate planning with blended families is in deciding what belongs to you, what belongs to your spouse, and what belongs to both of you. When putting together your estate plan, it is very important to be honest and up front about what you want to accomplish. If you are not straight forward with everyone in your family, it can cause problems down the road, resulting in challenges to your Will or Trust and rivalry between family members.
Both spouses should be on the same page; if you intend to leave a portion of your estate to your children from a previous marriage, let your spouse, as well as the rest of the family know and be understanding when your spouse wants to do the same. Once you do decide how you will divide your estate, there are a number of legal tools to help ensure that your wishes are carried out after your death.
Some of those tools would include a prenuptial agreement, or a postnuptial agreement if you’re already married. This is a good method of specifying what assets will be considered marital property, and which assets will be considered your own personal property.
Another tool is the Qualified Terminable Interest Property Trust. This type of trust can provide benefits for your current spouse, while at the same time preserving assets for your children from a previous marriage.
A life insurance policy is another way of ensuring that your children from a previous marriage receive their portion of your estate. You can name your children as beneficiaries, and leave other assets to your current spouse.
Once you have a plan in place, it’s good practice to review it on a regular basis. Make sure your beneficiary designations are still in line with the way you want to distribute your estate and should you divorce at some point, don’t forget to the make the necessary changes to your plan.
To learn more about estate planning for blended families, contact our office today.