Estate Planning Tips for Blended Families
Make sure your legacy and all your heirs are protected
Every day, hundreds of new "blended families" are formed in Arizona and throughout the United States. If you and/or your spouse have children from a previous relationship, your estate planning situation may be more complex, especially if you also have children from your current marriage. Figuring out how to distribute your legacy to all of your and your spouse's children is a challenging task, and it's one we've helped many Arizonans navigate. If you're trying to determine an estate plan for a blended family, here are a few things to keep in mind.
Don't forget to update your beneficiaries and Last Will and Testament
For understandable reasons, updating your estate planning documents is probably the last thing on your mind when you're going through a divorce. You might not even remember that your ex-spouse is still the beneficiary of the life insurance policy you bought 20 years ago. But it's important to take a step back and ensure everything is up to date and your current spouse is set up to inherit your property.
Naming beneficiaries is particularly important because property with a named beneficiary generally doesn't have to go through probate. Also, keep in mind that depending on the type of property and applicable state law, your current spouse may need to consent to have anyone else as beneficiary — which could lead to costly legal battles if those issues aren't ironed out during your life.
Remember, you're not required to treat every heir the same
There's no legal or moral obligation to leave the same amount of property to each of your heirs. That's true for anyone, but it's particularly important in blended families because you and your spouse may have significantly different financial situations and children who are at different stages of life. If you brought more assets to the marriage, it's okay to want to leave more to your heirs than your spouse's heirs. It's also okay to adjust your giving based on each child's level of need — and level of responsibility.
Instead, have a frank discussion with your spouse about each child's needs and what you can do to make sure your family is cared for after your passing. Depending on the situation, this may involve creating a special needs trust to provide for a disabled child or a "spendthrift trust" to provide for an heir with compulsive spending habits.
Have an attorney help you with your estate plan
As we wrote last month, it's not a good idea for anyone to create an estate plan without consulting an attorney, but that goes double if you're a parent of a blended family. There are many complexities that can affect estate planning during your second marriage, including commingled assets, former spouses, children with unique medical and financial needs, and so on. This isn't something you want to sort out on your own. Get experienced legal help.
If you're a parent of a blended family and need help with your estate plan, we would be honored to assist. Give us a call or contact us online for a consultation with an estate planning attorney.