Love can blind us. When it comes to your estate plan, you need to make sure you’re seeing clearly. This is true for all people, but it’s especially important when dealing with the complications that come with blended families. With the right estate planning strategies, you can ensure that your children will be provided for – no matter what.
No One Knows What the Future Will Bring
Some blended families get along better than others. If your marriage has caused tension among your relatives and in-laws, you may already understand the need for careful estate planning. But even if you’re currently enjoying marital bliss and harmony among your extended family, there are reasons to be cautious.
Simply put, leaving everything to your spouse may not be a wise idea. You may think that this is the simplest strategy, and also a good way to demonstrate your love and trust, but it could backfire – and your children could be the ones to pay the price.
After you are gone, your spouse could cut your children out and leave all of your assets to his or her own children. You may think this sounds unlikely, but you don’t know what might happen after you’re gone. Your spouse could be put under pressure by relatives to cut your children out. Your spouse could remarry and have new children. It’s also possible that your spouse could remarry and then die, leaving everything to the new spouse, who may not feel any connection to your children.
Don’t risk it. Take steps to make sure your children will get what they deserve.
A Simple Will Probably Won’t Cut It
The last will and testament is a key estate planning document. However, it may not always be enough, especially when blended families are involved.
In addition to a will, you may need the following estate planning strategies:
Consider creating an irrevocable trust. An irrevocable trust can be set up to give assets to your spouse for his or her lifetime, with the balance going to your children after your spouse’s death. This can be a great tool, and it can ensure that your assets will be protected if your spouse remarries. However, you must answer some questions to ensure that it can go smoothly. Who will make a sophisticated and experienced trustee to manage the irrevocable trust? Who will make financial decisions about investing and distributing assets? If there is tension between your spouse and children, who will act as the referee?
Consider leaving some assets to your children upon your death. If your children are waiting for your spouse to kick the proverbial bucket so they can receive their inheritance, unpleasant tension may result. You may be able to avoid some of this tension by leaving some assets to your children immediately upon your death, prior to the death of your spouse. Also consider whether there are any gifts of sentimental personal property that should go directly to your children, even if this means your spouse won’t retain access to the property anymore. (Depending on the age of your children, you may need to do this through a trust.)
Embrace prenuptial or postnuptial agreements. When creating an agreement, focus on what can you do that’s in the best interest of you, your spouse, your children and your spouse’s children. In addition to creating a prenuptial for your own marriage, consider an agreement that says the surviving spouse will sign a prenuptial agreement if he or she remarries. This strategy can go hand in hand with the irrevocable trust that you create.
Decide who you want to make health care decisions for you. In many states, you can only name one person, so you need to decide whether you want that person to be your spouse or one of your children. If you do not establish your wishes beforehand, there may be considerable fighting between your spouse and children. In some cases, stepparents cut off their stepchildren’s visitation rights and access to information, or vice versa. This was certainly the case for radio personality Casey Kasem. He reportedly gave power of attorney to his second wife, but his children disagreed with her decisions.
Start thinking about your funeral arrangements. Among other considerations, be sure to decide who will be in control of the disposition of your remains: your spouse or one of your children. Again, making your wishes clear beforehand can avoid a great deal of strife during a difficult time.
There’s a lot to consider, and every blended family is unique. An estate planning attorney can help you make sure you have a solid plan with all of the necessary documents.
To learn more, contact us or watch the video below in which Ginger Skinner discusses blended families scenarios on A.M. Northwest.