Blended families with multiple children can make trust planning essential.
You and your spouse met.
You fell in love.
You got married.
You also brought your own respective children to the new relationship.
Together, you navigated the joining of two families.
According to a recent The Daily Sentinel article titled “Estate Planning: A Trust Can Be Used to Protect Blended Families,” you also will need to navigate estate planning for your blended family.
In a blended family situation, your estate planning goals and concerns may involve more moving parts.
What should you consider?
Think about what happens to assets when the first spouse dies.
What if you die first and leave all of your assets to your surviving spouse?
You could disinherit your own children.
Under that scenario, your surviving spouse could simply choose to distribute your assets to his or her children alone.
However, even then your assets may not make it to your stepchildren.
What if your surviving spouse later remarries?
The assets could be joined with the estate of a future “new spouse” and, if your surviving spouse then predeceases, even your stepchildren may be disinherited.
This may leave all of your children penniless.
Let us say you both agree to divide your assets among your children upon the death of the surviving spouse.
There are still decisions to make.
Do you want to divide your inheritance in equal shares?
If you supported certain adult children more than others, you may find it more equitable to give the other children a larger inheritance.
Another consideration is mental capacity.
If the surviving spouse is diagnosed with Alzheimer’s or dementia, his or her mental capacity may be compromised.
This could result in poor estate planning or financial decisions.
What can you do to protect your blended family from these potential problems?
Schedule an appointment with an experienced estate planning attorney.
When it comes to planning for blended families, a trust can be a useful tool.
A trust allows greater control over asset management and distribution.
While alive, you can access the assets as needed.
When you die, they can be passed directly to your children.
You can give equal parts to your children or give more to those who received less support while you were alive.
If you have children in your blended family who would squander an inheritance, you can create incentives for receipt of the distributions.
No blended family is exactly the same, but an experienced estate planning attorney can help you create a plan to meet your specific goals.
Reference: The Daily Sentinel (Dec. 16, 2020) “Estate Planning: A Trust Can Be Used to Protect Blended Families”