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If your family is blended — and you or your spouse have children from previous relationships — estate planning can become more complex. You might develop a close bond with your stepchildren and wish to provide for them when you pass away. You may also want to ensure that your biological children receive the inheritance that you wish them to have. Taking proactive measures in advance and drafting a comprehensive estate plan can give you the peace of mind you need that your wishes will be carried out, regardless of how complicated your family dynamics are.
Here are several tips to keep in mind regarding estate planning for blended families:
1. Review Your Previous Estate Plan
One of the most important things you should do when blending your family with your spouse’s family is review any previous estate planning documents you had in place. Be sure that they are updated to prevent any unintended inheritances and your assets will be distributed in accordance with your objectives. Notably, unless you specifically provide for your stepchildren in your will or trust, they legally do not have the right to inherit anything from you under state law. You should review your estate plan at regular intervals or when any major life events occur to ensure that it reflects your current wishes.
2. Communicate Openly
Communicating openly when estate planning for blended families is essential. Letting your family know your plans and the reasons behind your decisions can help prevent misunderstandings and any potential probate disputes that could arise after your passing. It can also allow you to address complex issues, such as balancing your current spouse’s needs with those of your children from a previous marriage. Consider having a family meeting where you encourage everyone to voice their questions and concerns — this can help ensure your loved ones feel heard and understand your goals.
3. Know Your Options Regarding Trusts
A last will and testament is the foundation of every estate plan. However, there are various other tools you can use to ensure that your wishes will be carried out. For instance, a marital trust such as a QTIP trust can allow you to financially provide for your spouse during their lifetime — and the remainder of the assets could be passed to your children upon your spouse’s death. Using trusts when estate planning for blended families can help prevent the public (and often, time-consuming and costly) probate process.
4. Use Beneficiary Designations
Beneficiary designations can help ensure you pass your assets directly to your intended beneficiaries and avoid probate. You can designate beneficiaries on your retirement accounts, life insurance policies, and financial accounts. However, if beneficiary designations are part of your estate plan, it’s crucial not to forget about them and review them regularly. Since beneficiary designations override wills and intestate law, failure to update them with any changes in your family situation could lead to your assets passing to an unintended recipient.
5. Consider Using a Prenup or Postnup as Part of Your Estate Plan
Prenuptial and postnuptial agreements don’t only address property division issues in divorce — they can also be essential tools when it comes to estate planning for blended families. These instruments can clarify ownership of your assets, provide for children from prior marriages, safeguard your separate property, and ensure your surviving spouse receives the assets you intend when you pass away. Notably, clarifying what your spouse will or will not inherit in a prenup or postnup can be critical when it comes to protecting your children’s financial interests.
6. Appoint a Neutral Executor and Trustee
Select an executor for your estate who is neutral and can be fair to everyone involved. This is particularly important in blended families if you anticipate that there may be conflicts between your biological children and stepchildren. In some cases, you might consider appointing co-executors to provide a system of checks and balances — this would allow you to avoid hurt feelings or giving the appearance of favoritism. Another option is to appoint a professional executor such as an attorney or financial professional. You can also use an executor service.
Similarly, you will want to appoint a neutral trustee if you are using a trust as part of your estate plan. This can help ensure objectivity and that all beneficiaries are treated equally. Rather than appoint a family member, this role may be fulfilled by a trusted professional (i.e. – CPA or advisor) bank, trust company, or professional advisor.
Work with a Skillful Estate Planning Attorney
If you are beginning the process of estate planning with a blended family, it’s vital to work with a knowledgeable attorney who can best advise you regarding your specific situation. We welcome you to contact Estate Planning & Elder Law Services today to learn more about how we can assist you with creating a tailored plan that will ensure your wishes are carried out.
