Estate Planning for Blended Families
5 questions to get the ball rolling
If you’re part of a blended family, you’re in good company. In 2013, 40 percent of unions were remarriages for at least one spouse.* Whether your blended family came together through remarriage recently or decades ago, discussions about money and estate planning can be challenging to say the least. These conversations are important to have now so that you and your heirs know what to expect.
Following are five questions to help you get started.
- Who should be included in your financial and estate planning conversations? For many families, this is not a one-sided or even two-sided conversation. In addition to discussing estate plans with your spouse, consider involving grown children and stepchildren in the conversation. Keeping them informed now can help avoid unpleasant surprises after you pass on.
- How do you want assets to be distributed after you’re gone? If you leave all assets to the surviving spouse, this doesn’t ensure your children will get a share of the inheritance. The final decision about who gets what would rest with the surviving spouse. That’s why blended families often use estate planning strategies to provide peace of mind and (hopefully) prevent squabbles over money.
- How can estate planning help achieve your goals? There are a number of estate planning tools that can help meet the complex needs of blended families.
- You may consider a trust arrangement where the surviving spouse receives income with children named as beneficiaries of the trust, so they would inherit the remaining trust assets after the spouse passes away.
- Buying a life insurance policy may be another way to provide for children from a prior relationship as well as your new spouse and family. For example, you may designate children from a previous marriage as the beneficiaries of the life insurance policy and leave other assets to your current spouse and the children you have together.
- Who is listed as beneficiary on your financial and retirement accounts? It’s important to regularly review beneficiaries on all financial accounts to make sure they are in line with your wishes. Beneficiary designations override the instructions in your will, so they must be up to date.
- What level of care and financial support do your children need? Consider the ages and needs of children and stepchildren. Are your children self-sufficient or will they require years of financial support? Do you have a child with special needs? Every family situation is different, which is why you should review your family’s needs and plan accordingly.
Need some guidance? A Client Advisor at Seaside National Bank & Trust can help create an estate plan to protect your family’s future, learn more here and contact us.
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