On behalf of Sayer Regan & Thayer of Sayer Regan & Thayer, LLP posted on Wednesday, April 28, 2021.
The landscape of family life is changing. The typical two-parent household is on the decline in this country, as a result of the rise of divorce, remarriage and co-habitation. This diversity can be enlightening, as American families look very different than they did just a few decades ago. However, blended families can pose challenges when it comes to estate planning simply due to the sheer number of people involved and the complicated configurations.
Having an estate planning attorney on your side when blending your families is imperative. Here are some tips on how to protect your new family and your assets.
You’ll Need More Than a Will
A simple will is not enough when more than one family is involved. By only having a basic will, you are allowing the possibility that your own biological children may be left out of your spouse’s estate later on after you pass. You may be thinking about creating an “I love you will” used by married couples whereby each spouse leaves their entire estate to the other one, and then to any children.
It may look something like this:
“Upon my death, I leave my entire estate to my spouse, and upon the death of my spouse, our assets will go to our children.”
Sounds straightforward enough, but the problem is, once you have died, your spouse could cut your kids out of that will and give that money to their own children or even a new spouse, as he or she has no legal obligation to your children after you are gone.
Craft a Trust
This is why you should create a trust leaving all assets to your spouse for their lifetime, with the remaining money being passed to your children once that spouse dies. This way, you are providing for your spouse with funds to use when alive, but immediately after their death, the funds go to your own children.
Choose a Trustworthy Trustee
Your trust is only as good as the trustworthiness of the person you put in charge of it. Make sure you choose wisely as to who will make important financial decisions about investing your assets and who will distribute them to your spouse according to your wishes after you die. There is often quite a bit of tension between what your spouse thinks they are entitled to and what your children want to part with. Someone has to act as referee.
Decide on a Health Care Proxy
You will also have to decide who will make health care decisions for you if you can no longer do so. Whether that is your spouse or your son or daughter, fighting can result over this. Stepparents have been known to cut off access to their spouse’s kids when the spouse is in the hospital, and vice versa. You don’t want anyone preventing the other party from visiting you in an emergency.
Realize Your Spouse Will Re-Marry
It’s foolish to think your spouse will never remarry after you are gone. You want the trust to protect your estate if your spouse was to get married to someone else. You don’t want your money going to the new wife or husband.
Leave Some Assets to Your Biological Children
Make sure you tuck away some assets for your children to have immediate access to once you die so they don’t have to wait until their stepparent passes away to get access to funds.
Contact Sayer, Regan & Thayer LLP
If you have questions about estate planning and how your blended family fits into all that, contact us toll free at 866-378-5836 or 401-324-9915 for a free, no-obligation consultation.
These materials have been prepared by SRT for informational purposes only and are not intended and should not be construed as legal advice.