You will soon realize that if you have a blended family, estate planning for you is going to be a little different. It is not inherently distinct from what goes down in a traditional family but in most cases, people would want to consider a lawyer who is experienced in handling this kind of situation. You must discuss with your spouse how each child is going to be nominated in your estate, especially if there are any children from your previous marriage(s). This is one of the biggest challenges that you will have to face if you are a part of a blended family. As a guardian, you would benefit from knowing where each one of your assets is going. You will also have to consider sibling relationships and what will fit each child if you want to secure their future. Each parent will have to keep special considerations in mind when planning their estate. The most common practice is that of leaving the entire estate to the other partner. Blended families may benefit a lot from establishing trusts which are going to ensure that each child receives their inheritance after they have passed. This is one way of protecting their assets and making sure that everyone receives what is fair for them.
Are You A Part Of A Blended Family?
Do you know that more than 16% of children in America are living in a blended family? A blended family refers to an arrangement where there are married couples and the children from previous marriages or relationships also are a part of this family. A blended family can include stepchildren or half-siblings. They may also include extended family members who reside in the same house. This kind of family structure is becoming more and more common these days. A blended family faces a lot of issues, especially when it comes to splitting the entire estate. Some of the pointers that they should keep in mind when protecting their family and their assets are as follows:
Understand The Limitations Of A Traditional Will
A traditional will is a little risky for your biological children because they might get cut out of the estate that has been transferred to your spouse. If you decide to leave everything to your spouse, be aware that after you are gone, your biological children might not end up with anything at all. This is because your spouse has no obligation to your children.
Consider Using A Well-Crafted Trust
A well-crafted trust stands the test of time. You can pass a major chunk of your estate to your children upon your death, all the while ensuring that your spouse has access to the funds as well.
Your Trustee Should Be Experienced And Well Aware
You have to choose a dependable person who will be responsible for investing the assets and also distributing the same among your spouse and children after you are gone. An experienced trustee can eliminate any potential tension between any of your nominees in the event of your passing.
What If Your Surviving Spouse Decides To Remarry?
You may attach certain conditions to your will or trust dictating how your assets will be distributed in case your spouse decides to remarry.
Leave A Few Assets To Your Biological Children
Whether you decide to create a will or a trust, make it a point to leave some of your assets for your biological children. They should not have to wait for their stepmother or stepfather to disseminate your assets among them.
Appoint Someone Responsible For Your Health Care Decisions
Most of the states across the country will allow you to name only one person to make your health care decisions. That can be your surviving spouse or anyone in your family that you trust with your health. You may want to give this a little extra time and choose a person you can count on no matter what.
Thinking About Creating A Trust – A Practical Option For Blended Families
Estate planning for blended families can be simplified if they choose to create a trust. The major concerns that a trust can address include questions regarding inheritance, size of the estate, naming the executor, and the overall fairness of the document. The following options are available for you when planning your estate for your blended family:
All your assets go into a combined trust following your death. The benefit of this structure is that the surviving spouse can easily determine what assets will go to which child as per his or her needs.
By creating a marital trust, you will be passing your assets to your surviving spouse. You can also name any of your children as the nominees of your residual assets after your spouse has passed away. This lets you include all your children in the trust
This allows you to transfer all your assets to the surviving spouse. Your children are not involved in this trust. This is a simpler form of estate planning and you will have to trust your spouse for them to properly account for all your children after you have passed.
Not Willing To Create A Trust? You Have The Following Too:
You can also leave all your assets equally to each one of your children. You will have to create a will for this and you must discuss all these details with your spouse before you create any such document.
Life Insurance And Retirement Accounts
Life insurance and retirement accounts are a great way to disseminate your assets among your family members after you have passed. You can leave most of your money and estate to your living spouse. You can take a life insurance policy to provide for your children and name them as your beneficiaries.
Power Of Attorney
You can create a durable power of attorney which is going to dictate who handles your financial affairs. In addition to this, you can also create a living will that explains your wishes if you become terminally ill or incapacitated. Create a healthcare power of attorney to designate someone responsible to make medical decisions on your behalf.
Regardless of which document you decide to create, it is always better to talk with your family members in advance. It is also essential to choose someone experienced and sophisticated to handle your financial affairs after you have passed.