There are several things that blended families need to consider when updating their estate plans, says The University Herald in the article “The Challenges and Complexities of Estate Planning for Blended Families.”
Estate plans should be reviewed and updated whenever there’s a major life event, like a divorce, marriage, or the birth or adoption of a child. If you don’t do this, it can lead to disastrous consequences after your death, like giving all your assets to an ex-spouse.
If you have children from previous marriages, make sure they inherit the assets you desire after your death. When new spouses are named as sole beneficiaries on retirement accounts, life insurance policies, and other accounts, they aren’t legally required to share any assets with the children.
Take time to review and update your estate plan. It will save you and your family a lot of stress in the future.
Your estate planning attorney can help you with this process.
You may need more than a simple will to protect your biological children’s ability to inherit. If you draft a will that leaves everything to your new spouse, he or she can cut out the children from your previous marriage altogether. Ask your attorney about a trust for those children. There are many options.
You can create a trust that will leave assets to your new spouse during his or her lifetime and then pass those assets to your children upon your spouse’s death. This is known in the industry as an “AB Trust.” There is also a trust known as an “ABC Trust.” Various assets are allocated to each trust, and while this type of trust can be a little complicated, the trusts will ensure that wishes are met, and everyone inherits as you want.
Be sure you that select your trustee wisely. It’s not uncommon to have tension between your spouse and your children. The trustee may need to serve as a referee between them, so name a person who will carry out your wishes as intended and who respects both your children and your spouse.
Another option is to simply leave assets to your biological children upon your death. The problem here is, however, if your spouse is depending upon you to provide a means of support after you have passed, they may be left to fend for themselves.
An experienced estate planning attorney will be able to help you map out a plan so that no one is left behind. The earlier in your second (or subsequent) married life you start this process, the better.
Reference: University Herald (June 29, 2019) “The Challenges and Complexities of Estate Planning for Blended Families”