Estate Planning With Blended Families
How Should Your Estate Plan Deal with a Blended Family?
Analysis shows 90 percent of estate planning deals with blended families, which is understandable when the divorce rate is at 50 percent. A “blended family” in this case is defined as individuals with children who remarry after divorce or death of a spouse. The biggest risk for blended families is doing no planning at all. The problem with this is, invariably, is someone gets left out. For example, step-children have no rights in the eyes of the law. The main three questions facing blended families are:
1. Combine Assets or Keep Assets Separate?
If the assets will remain separate, each individual should complete their own trust. Some assets can be joint, and the trusts will each deal with the distribution of those as well. Some couples combine their assets and can create one trust. After remarriage, the older the children are, the more likely it is that they expect consideration in a will or trust. Clear language will make a couples’ wishes known as to what assets are combined or separate.
2. Selection of a Trustee or Personal Representative—who will represent the trust or trusts?
One child, two children, or a third party who will remain impartial between all the heirs? This is an important decision, because arguments as to what the parents’ wishes were are far more likely to come up if the trustee is not impartial.
3. When one spouse dies, do all the assets go to the surviving spouse, or are some distributed to the children as well?
A trust can designate what happens to all assets. Another part of this question is if all children are equal heirs, and if not, who is heir to what part of the assets. Many families have decisions to make as to what will happen to family heirlooms or investments. If one spouse brought far more assets into a late marriage than the other, many times, their grown children are concerned what will happen to family money and property. Grandparents may also skip generations and add grandchildren directly into their wills, skipping a spouse and that spouse’s children.
The scenarios listed above are very common and are only three of hundreds that could happen. The moral of the story here is that families are important, and therefore take the time to make sure you make them important. Please contact the firm if you need legal assistance with estate planning in Boise.