Estate planning for blended families
Many more families today are blended than may have been the case in years past. Blended families can present unique challenges concerning estate planning that individuals considering how to approach estate planning should be aware of. Effective estate planning is always a good idea but it can have especially important implications in cases of blended families. To provide peace of mind for the estate planner, it is essential not to leave estate planning undone, leaving it instead to a second spouse and children that may be from a previous marriage to work out details which may ultimately lead to disputes.
It is important to begin by having an honest conversation with your spouse concerning estate planning and to also involve grown children if applicable. It is important to understand goals and what the estate planner foresees for how assets will be distributed. It is also important to account for children from a previous marriage if that is what the estate planner wishes to do because traditional estate planning provides for the spouse first and then children which can lead to unintended results in circumstances of blended families and remarriages.
To ensure that the estate plan includes the estate planner’s wishes for beneficiaries, there are several tools the area of estate planning law provides. One option is a trust which can be used for separate property the estate planner wishes to go to their children. A trust can also be effectively used if the estate planner shares children with their current spouse as well. It is also important to include a power of attorney in the estate plan which designates an individual to handle financial and legal affairs if the estate planner is unable to do so. An advanced healthcare directive is also important and provides for a trusted and named individual to make healthcare decisions if the estate planner is unable to do so.
As we are all aware, life and circumstances change but it is important that estate planning documents, such as a will and others, are not only properly executed but are also updated regularly to reflect those changes and the look of the estate planner’s life currently. This includes updating beneficiary designations and documents associated with investment accounts, retirement, life insurance and other policies and accounts. There is a lot to consider when estate planning but effectively establishing and maintaining a carefully thought out estate plan provides peace of mind now and later.
Source: Huffington Post, “Estate Planning for Blended Families,” Alexandra Smyser, Feb. 27, 2015