Creating a blended family with your spouse can create some unique circumstances. And if you’re not careful, your interests could be negatively affected. This is especially true in the context of estate planning. For example, if you leave your assets to your spouse without any other estate planning instructions in place, then they’re under no obligation to leave those financial resources to your children when they pass away. This could result in your children being cut out of your inheritance scheme, which could run counter to your intentions.
The question, then, is how do you create an estate plan that protects your vision of the future and your loved ones? There are certainly a lot of mistakes you can make along the way, but fortunately there are many estate planning tools you can use to achieve your goals here. So, let’s dive in and look at some of them.
What estate planning tools can you use to protect your interests in a blended family?
Before signing off on your estate plan, you should consider the challenges of a blended family. This requires you take a long view of your family dynamics in comparison to how you want your assets to be distributed. With that in mind, here are some actions you can take to protect your estate in the context of a blended family:
- Lifetime giving: You can give your loved ones several thousands of dollars each year in a tax-exempt fashion. Therefore, if you want to support your loved ones outside the confines of an estate plan, then you can give them financial gifts while you’re still alive. This has the added benefit of allowing you to see your loved ones enjoy those financial gifts.
- Purchasing life insurance: When you buy one of these policies, you name a beneficiary. So, another way to support your loved one is to name them as a beneficiary of your life insurance policy, which then ensures that they’ll receive compensation when you pass away, regardless of what your estate plan says.
- Being specific: If you have certain assets that you want your children to inherit, then you might want to specifically address them in your plan. This will avoid confusion over who is entitled to the property, and it’ll ensure that they receive the financial support intended for them.
- Using a remainder trust: With a remainder trust, you can leave everything to your spouse, but then specify what happens to those assets that remain when your spouse passes away. This is a good option if you want to provide for your spouse while still protecting your children in the long-term.
- Discuss your concerns with your spouse: Hopefully you and your spouse have a strong enough relationship that you can discuss your estate planning concerns with them without getting into a disagreement. This can help alleviate your concerns and inform your loved ones so that they’re not taken by surprise when your estate plan and its distribution scheme is explained to them. If you don’t do this, then it can result in extensive infighting that’s costly to relationships and your estate.
Leave nothing to chance when creating an estate plan
Creating an estate plan might seem simple enough, but every decision you make during the process can have an impact on your family, your estate and your legacy for decades to come. So, it’s important that you understand your estate planning options so that you can make informed decisions that advance your vision of the future. If you have questions about how to get a handle on the creation of your estate plan, then please be sure to discuss the matter with your attorney.