Blended families face unique challenges when it comes to estate planning. If a couple both come into the marriage with children of their own, they might have to take measures to protect their children's inheritance. If you have a blended family, here is what you need to know about the challenges of estate planning.
Why Not Leave Everything to the Surviving Spouse?
Some couples create wills that would leave all their assets to their surviving spouse. The idea is that the surviving spouse would then evenly distribute the assets to all the children after his or her death. However, this does not always happen.
There is nothing that prevents the surviving spouse from making changes to his or her will to only leave assets to his or her children. This would effectively cut the step-children out of the will. Legally, they would have difficulty in arguing that they are entitled to some of the assets because they were initially left to the surviving spouse.
What Can You Do as a Couple?
To ensure that both you and your spouse's children are protected, there are several estate planning options available. One potential solution is to establish a joint trust. You and your spouse's assets would be transferred to the trust. The terms for the trust can be set to prevent the exclusion of any child.
Another possible way to handle the situation is to create a contract for the will. The contract would basically state that you and your spouse have created a will and that the surviving spouse agrees to not alter some or all of the provisions that are made in the will after the death of the other spouse.
What Can You Independently Do?
If you are still planning to create a joint will with your spouse, there other methods you can use to ensure your children are left with an inheritance after your death. For instance, you could take out a life insurance policy and name your children as the beneficiaries.
You also have the option of distributing your assets to your children before your death. However, there is the risk of not having the time to distribute the assets in time. If you have not made provisions for the assets, it is likely that your spouse will become the beneficiary and have the right to distribute them as he or she sees fit.
To further explore how you can protect your children's assets, talk to an estate planning attorney, like one from Linn Schisel & DeMarco Attorneys At Law.
Share14 July 2017
Too many single people assume they don't need to plan their estate. My brother fell into this category, and his unexpected passing left our entire family struggling to deal with his home, belongings, and financial accounts. It took nearly three years for the courts to set up a deal because he left no paperwork detailing how he wanted his estate divided. The situation immediately convinced me to work on my own estate, even though I'm still in my early 30's and don't have children or a spouse to worry about. Since it's a little harder to pick beneficiaries and estate managers when you're single, I collected the resources I used for making my own decisions and decided to publish them here on my blog. Use these resources before talking to an estate planning attorney so you're prepared for making hard decisions.