More common than they once were, blended families need to take special care with estate planning.
Estate planning for blended families can become complicated, but neglecting to take care of it in advance can lead to unhappy outcomes for step-parents and step-siblings. 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 will arise.
Here are a few general ideas to help you think about your blended family:
Update Beneficiary Designations. Get all of your beneficiaries set and updated, like those on your retirement accounts and insurance policies. This will ensure that they reflect your blended family. It is important to remember that these designations take priority over the instructions in your will—it’s a totally separate deal.
Living Trust. While you’re at it, consider a professional trustee for a living trust. Trusts can help you to avoid probate and allow you the freedom to decide how and when you want your assets distributed. After you pass away, a properly created trust can provide a surviving spouse with income for life. After he or she dies, it will then give the children from an earlier marriage the remainder of the trust assets. To be fair to all, you may want to hire a professional third-party trustee who isn’t a beneficiary of the trust and isn’t entitled any of the trust assets. This person or company wouldn’t have a vested interest in how the proceeds of the trust are distributed.
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 your will, your living trust, and any other relevant estate-planning arrangements in the event that you and your new spouse agree to keep your assets separate so you can each pass an inheritance on to your own children.
Don’t neglect to have frank conversations about your estate plan and your intentions with everyone n 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.
Reference: Fairfield Bay (AR) News (November 9, 2016) “Estate Planning Tips for Blended Families”