After remarrying, many spouses have family members from previous marriages or relationships in their new “blended” family. Estate planning can provide plenty of benefits – and with the right estate plan, you can ensure that everyone in your blended family is accounted for. Creating an effective plan for blended families can be a little more difficult than your average estate plan, but this blog serves to help you get started on one that works for you.
Special Considerations for Blended Families
To start, if you’ve remarried and not yet revised your estate plan, you should do so as soon as possible. An out-of-date estate plan likely does not take into consideration your new marital status, and so could leave the new members of your blended family out. Your old estate plan also likely assigns property to your ex-spouse, which could lead to issues in distributing assets down the road. Often, these old documents are revoked and new ones drafted in their place, to ensure their efficacy.
There are several trust strategies that can benefit blended families. Often, qualified terminable interest property, or QTIP trusts, are a popular option. These trusts allow you to provide for your spouse using your assets while they care for your children, and then in turn pass those assets onto you choose: your children, your spouse’s children, or some combination of both. The QTIP trust provides income to your new spouse for their lifetime but becomes irrevocable and cannot be changed after your death. This means that your assets go to who you choose.
In addition, trust planning can be very flexible. For instance, you may name multiple trustees, which could be useful if your assets are managed by a financial institution. You may name your surviving spouse as a trustee while also naming a financial institution as a co-trustee so that it can continue managing the assets. Similarly, a professional co-trustee could look after your spouse in case of dementia or other health issues. After the passing of the surviving spouse, the assets are then distributed to your beneficiaries as you define in your estate plan.
Depending on your relationship with your ex-spouse, you’ll likely want to revisit their involvement in your estate plan. For some relationships, this means eliminating them from the distribution of your assets completely. For other more amicable relationships, it may be appropriate to include them as someone to help facilitate distributions to your children or assign them principal from your trust to ensure they’re provided for.
The team at Harbor Law provides expert-level services that are sure to make the process of planning for your blended family much easier. Contact us today at (888) 335-2815 or via our website to schedule your free consultation.