Blended families have become commonplace and starting anew as you broaden your familial relationships can be a beautiful thing. At the same time, from an estate planning perspective, there can be some challenges that you may not know how to address.
Beneficiary designations would be an immediate consideration if you are getting remarried. You should review your insurance policies and retirement accounts and make updates if necessary.
Plus, if you have an estate plan in place, you may have durable powers of attorney that name agents to act on your behalf if you ever become incapacitated. These designations may need to be updated as well. You could empower your new spouse to act as the agent, but you can alternately use some other family members, friends, or associates.
Each partner may be bringing personal resources into the marriage. Under these circumstances, a prenuptial agreement can be something to consider. A properly constructed document can protect each of you and allow you to enter into the marriage as a couple with total peace of mind.
If you are getting remarried as a parent, you may want to make sure that your children get their fair share of your personal assets if you predecease your new spouse. There is an estate planning device that is specifically designed for this purpose that is called a qualified terminable interest property trust. Because of the wordy nature of the device, it is often referred to as a QTIP trust.
With this type of trust, your spouse would be able to benefit from assets that are in the trust if you die first. For example, if you convey residential property and motor vehicles that you own into the trust, your spouse would be able to live in the homes and the drive the cars. You can also allow your surviving spouse to receive income that is generated by the trust’s principal.
Though your spouse would be able to benefit from property that is in the trust, your instructions could never be altered with regard to the secondary beneficiaries. After the passing of your surviving spouse, your children would assume ownership of the property that remains in the qualified terminable interest property trust.
Of course, if you and your new spouse ultimately have children, this can add an additional layer of complexity when you are making estate planning decisions. It can be hard to know where to begin when you are juggling so many different priorities. This is why legal advice is so important when you are devising an estate plan that addresses the new dynamic.
Understand Your Options!
Clearly, if you are planning your estate as a member of a blended family, you are going to have a lot of things on your mind. It can seem as though you are entering uncharted waters, and you may be dealing with conflicting emotions. This is understandable, but there are proven estate planning strategies that can address any blended family situation. If you would like to explore your options, our firm would be glad to help.
We offer no obligation consultations, and we can answer all of your questions and help you implement a plan if you are ready to take action. To set up an appointment, send us a message through our contact page or call us at 512-478-3800.