Carefully, very carefully.
Having a blended family can complicate matters when it comes to estate planning.
Whether you are widowed or divorced, you have fallen in love again.
Love and marriage bring so many joys.
But they can also bring complications.
Especially when the marriage merges two established families.
What can you do to uncomplicate an already complicated situation?
According to The Fairfield Bay News article titled “Estate Planning Tips for Blended Families,” you should start your estate planning immediately and work with an experienced estate planning attorney.
What should you be prepared to discuss with your attorney?
If you have retirement accounts or a life insurance policy, you will need to make the appropriate changes.
Chances are you do not want your ex-spouse to inherit those funds.
Merely updating your will does not guarantee your payouts and accounts will go to the desired individual.
Account or policy beneficiary designations take precedent over what has been stated in a will.
Note: Extra special care must be taken when it comes to ERISA retirement funds (e.g., think 401k or profit-sharing plans), because your "spouse" is automatically the beneficiary unless he or she waives that right ... and only after becoming your spouse.
Accordingly, the beneficiary arrangement regarding your ERISA retirement plans should be addressed early and clearly (see "prenuptial agreements"discussed below).
Creating a living trust.
A living trust may give you more control in the distributions of your assets.
Also, unlike a will, a trust does not go through probate, making the distribution of these assets more private.
A trust is a great way to provide for your new spouse while also protecting the remaining finances for your children after your new spouse has passed away.
If you choose to create a trust, you should consider hiring a professional trustee.
By having a third-party individual control the distributions, you will remove any semblance of favoritism or manipulation.
Signing a prenuptial agreement.
A prenuptial agreement encourages spouses to discuss before marriage the assets they each bring to the relationship.
With a prenuptial agreement, you can provide full instructions regarding how your property will be divided in your will or living trust.
This agreement is also makes passing assets to each of your children simple because it can keep your assets separate.
By discussing these issues with an experienced estate planning attorney, he or she can create a plan perfect for the needs of your blended family.
Love may be blind, but you should always go into a new relationship with both eyes wide open.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Fairfield Bay (AR) News (November 9, 2016) “Estate Planning Tips for Blended Families”