Blended families are families where one or both spouses have children from previous relationships or marriages.
How to do Estate Planning the Right Way?
There are many options and considerations to look at when doing your estate planning in a blended family setting. Below we will briefly discuss the major concerns of parents in blended families and how estate planning can help them.
What Are Things to Consider When Completing Your Estate Planning?
The biggest concern for parents in blended families is to ensure that their children get a fair distribution of their assets no matter which partner dies first. Partners usually want to ensure that when the first to pass away leaves an entire estate to the surviving spouse, that then the surviving spouse prepares his or her estate planning documents in a way that would also provide for the children of the partner that passed away first. There are few ways that will provide the support for the surviving spouse, as well as ensure that all children receive a fair share.
Options for Estate Planning in Blended Families
- Each partner can create an estate plan that will make a certain distribution to the children upon that partner’s death. However, something to remember is that the surviving spouse can still create his or her estate planning later on that will favor his or her children, or completely exclude the children of the predeceased partner.
- Partners can also consider premarital or marital agreements before they marry, which can include living arrangements, rights and obligations of each party in case of a divorce as well as rights and obligations of the surviving spouse in the estate of the deceased spouse. This, however, still leaves the issue of the distribution of any property that is acquired after marriage and is considered marital property.
- Another option is a Spendthrift Trust which can permit distributions to surviving spouse or children.
- Bloodline Trusts are created with the goal of keeping the money in the family. The trust allows for distributions only to those that are related to the creator of the trust by blood. It will also protect the beneficiaries’ money from creditors, and in case of a divorce, from being considered marital property.
- Last option we will discuss is a contract to make a will. It may be a simple estate planning solution, which essentially prohibits the surviving spouse from changing his or her will after the death of the first spouse. This option can however, become troubling if the surviving spouse has good and valid reasons to change his or her will but is prohibited from doing so. Also, this does not prevent the surviving spouse from giving most or all of the assets to his or her children while alive, leaving very little to nothing to be distributed upon his or her death.
If you would like to find out more about estate planning options, please call/text (216) 586-4246 to schedule an appointment.