Estate Planning Considerations for Blended Families
Estate planning for blended families is important to avoid probate court and legal issues down the road. It’s a reliable way of ensuring that each child in your family, whether through marriage or biological, is protected. The estate planning process involves nominating guardians, planning each inheritance, and choosing an executor among other things.
A seasoned estate planning attorney in southern California can help you understand the various legal complexities involved in estate planning for blended families and the best way of tackling them.
Setting up a Trust for Your Blended Family
Spouses usually leave everything to each other through their individual wills. Moreover, if you pass away without leaving a will behind, your current spouse will outrightly own all your property. The problem with blended families is that your spouse may not leave anything to the stepchildren you had from a previous marriage. This is including the property they obtain through a will after your passing.
The best way to provide for your spouse and kids from all relationships is to place everything or a part of your money and property in a trust. Your spouse should be able to use these assets during their lifetime and whatever is left goes to your children as per your wishes.
You may want to pay attention to the following considerations:
- You need someone to be the trustee and take care of the trust when you die. It is possible for kids and spouses to have competing goals that result in family conflict. Experts usually recommend choosing a neutral trustee, such as a bank.
- If your spouse is still young, your children may not receive any money for several years. In fact, there may be nothing left if the estate is not a sizeable sum. You can also designate your children as beneficiaries in your life insurance policies and retirement accounts to make sure they receive an immediate inheritance.
It’s best that you work with a qualified estate planning attorney with experience in handling blended family complications.
Beneficiaries for Life Insurance and Retirement Accounts
Estate planning doesn’t need to be different if you have a blended family. In relation to this, you should never forget the fact that there are always more people to consider when you have a blended family. You and your spouse should discuss how each child needs to be accounted for. This is especially important if there are children from previous marriages.
Choosing a guardian is the most challenging step involving estate planning when you have a blended family. Parents need to consider sibling relationships and the best fit for each child. You can provide for your complex web of different members through life insurance. For instance, you can leave most of your property and money to your spouse. Furthermore, you can provide for your children by taking out life insurance policies with them as beneficiaries.
Retirement accounts, such as 401(k) and IRA are not passed down through the will. These are directly disbursed to the primary beneficiary. In fact, the beneficiary listed on the accounts will get the money even if the will says otherwise. If you are divorced, make sure you update your beneficiaries. This will ensure the retirement savings don’t end up with your ex.
Powers of Attorney and Living Wills
You need to have a document explaining your wishes if you were to become terminally ill. This document, also known as a living will, should be made part of your estate plan. A healthcare power of attorney can make medical decisions on your behalf if you are unable to do so. You should also have durable power of attorney.
This person will handle all your financial affairs if you cannot. This is someone who has been through the legal battlefields before and knows how to survive a hostile environment.
Typically, people name their spouse as the different powers of attorney. Stemming from this, this may hurt feelings and lead to arguments in a blended family. Children from a previous relationship can fight over what their parents would have wanted with the new spouse.
Whether you have a blended family or not, it is important that you choose a level-headed person as your power of attorney. This person should be able to get along with other members of your family. You should also avoid surprises by letting everyone else in the family know of your wishes and plans in advance.
Without an estate plan, the property and money will ordinarily get handed down through the will and divided as per California’s intestacy laws. You won’t have any say over the manner in which the property is divided among your children, spouse, and ex-partners. It’s highly likely that your stepchildren will not inherit anything.
Talk to a Skilled and Knowledgeable Estate Planning Attorney – Book Your Free Consultation Today
If your family is among the millions of blended families in the United States, the experienced and capable estate planning attorneys at Garmo & Garmo, LLP can help you create a comprehensive, legally sound estate plan or amend an existing one to make sure that your wishes for your (step)children, (step)grandchildren, partner, ex-partner, and other members are carried out.
To schedule your free case review with one of our lawyers today, call us at 619-441-2500 or contact us online.