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What Constitutes a Blended Family?
A blended family often refers to married couples with children from previous marriages or relationships. Blended families can include families with stepchildren or half siblings, extended family members who live in the same home, and more. These family structures are becoming more and more common today.
The process of Estate Planning when it comes to blended families may seem complicated, but that does not make it any less important. By building a concrete plan you can help avoid legal issues down the road. Often, the best way to get started is by discussing your ideal plans with your spouse. When you are both ready, Appleton can help you put the right documents in place.
Is Estate Planning Different For Blended Families?
Estate Planning is not inherently different for blended families, but in most cases, there are more people to consider. This will require you and your spouse to discuss how each child will be accounted for, especially if there are children from previous marriages involved. One of the most challenging steps for blended families is choosing who to select as a guardian if anything were to happen. Parents will need to think about the best fit for each child, while also considering sibling relationships.
When Estate Planning for blended families, parents will also need to take special care dividing up assets and funds. It is fairly common for spouses to leave all of their Estate to the other partner, but with children from previous relationships to think about this can be more complicated. For example, blended families may want to establish a Testamentary Trust to ensure each child receives their inheritance if one spouse were to die before the other. These safeguards can help avoid any potential unfair treatment or disagreements down the road.
Best Estate Planning Options for Blended Families
The best Estate Planning option for blended families is one that takes each family relationship into account. Within blended family structures there can be concerns about inheritance size, naming an executor, and overall fairness. These concerns can bring up difficulties when making an Estate Plan, but they are important to address. Review some of the most common Estate Planning options for blended families to help you get started:
- Family Trusts: This type of Testamentary Trust sees all assets going into a combined Trust following the death of the first spouse. The benefit to this structure is that the surviving parent can determine how to distribute assets based on each child’s needs.
- Outright Ownership: This Estate Planning structure allows all assets to transfer to the surviving spouse, without a Trust for the children involved. This is a relatively simple Estate Planning structure, though each spouse will need to trust that the other will properly account for the children.
- Immediate Bequests: Another option that does not involve Trusts is to leave assets to each child within your actual Will. This can occasionally be a sensitive topic to discuss with your spouse, but in cases where you want your child to inherit items directly it can be the best choice.
Should you make a new Estate Plan after marriage?
You should always revisit your Estate Plan after a divorce or marriage, especially when children are involved. This is the only way to ensure your children are taken care of, and that your best wishes are followed (especially when it comes to healthcare plans and beneficiaries). In some cases, you may need to revoke documents made with a former spouse and revisiting your Estate Plan is the best way to accomplish that.
Estate Planning Tips for Blended Families
A good rule of thumb when Estate Planning for a blended family is to be as thorough as possible. Take time with your spouse, and in some cases even your former spouse, to ensure each child is properly taken care of in your Estate Plan. There are numerous options that can allow you to offer proper financial support to your children after death. Do not be afraid to call in a professional to help guide these decisions – your qualified professional Financial Advisor should be able to help you identify the best Estate Planning structure for your blended family.
Another important tip when thinking about blended families is to consider a prenuptial agreement before remarrying. This can be a great way to plan ahead and ensure you and your new spouse are on the same page from the beginning. Finally, always remember to revisit your Estate Plan every three years to make sure it remains updated. While life often gets in the way of these tasks, it is crucial that your Estate Plan accounts for all new members of a blended family.
Extra care needs to be taken to ensure each member of a blended family is taken care of legally. This means following the correct procedures when Estate Planning for blended families. Parents should take special care to nominate guardians and divide assets however they deem appropriate. When it comes to blended families, no two are the same and that also applies to Estate Plans.