Estate Planning for Blended Families

Estate planning can be challenging for everyone, but it can be particularly difficult for blended families with children from current and previous relationships. Careful planning with the help of an experienced estate planning attorney, communication, and strategic estate planning tools can help blended families achieve their estate planning goals.

Attorney Christopher Heritage has extensive experience helping blended families in Palm Springs create comprehensive estate plans. Whether you need to create an estate plan for the first time or you'd like to update your estate plan, don't hesitate to contact Heritage Legal, PC.

Estate Planning Challenges Faced By Blended Families

Blended families are more common than ever. Nearly half of all marriages in the United States include at least one previously married spouse, and in nearly a quarter of marriages, both spouses were previously married. Blended families benefit from estate planning with clear goals. When you discuss your estate plan with Mr. Heritage, he will ask questions to help you narrow down your unique goals. For many spouses in blended families, the biggest estate planning question involves where each spouse's money will go when he or she passes away.

Remarried couples may want to ensure that their spouse will be cared for if they pass away first. Additionally, many spouses want the children from their previous marriages to become their beneficiaries. The challenge comes from creating an estate plan that allows all parties to remain satisfied and cared for. Agreeing on the main goal of your estate plan is the first step you can take. Once a couple decides the best path for how their assets will be distributed after they pass away and how much control they'd like the surviving spouse to exercise, the estate planning attorney can move forward and draft the necessary legal documents.

Trusts Are Important Estate Planning Tools for Blended Families

Trusts are among the most effective and valuable tools for blended families. Remarried couples frequently used a trust to determine how they would distribute their assets. Many different types of trusts serve specific estate planning goals. Depending on the couple's situation and the amount of their assets, a trust may be revocable or irrevocable. The couple will still benefit from having a last will and testament to ensure that any assets they own that aren't titled in the trust name will be transferred according to their wishes.

Several benefits come from creating a trust-based estate plan. Most importantly, beneficiaries will not need to go through probate to receive assets from the deceased individual's estate. One of the most common scenarios for blended families is for the husband to create a living trust and name himself the trustee during his lifetime. After his death, the surviving spouse will continue to receive income for life. The remainder of the assets in the trust will be transferred to the husband's children after his wife passes away. Challenges can arise for blended families who create a trust when it comes to naming the successor trustee. 

When the husband passes away, the successor trustee will take control of the trust's assets. The husband may name the surviving spouse or one of his children from a previous marriage without considering their conflicting interests. In this case, appointing a professional third-party trustee, such as an attorney or bank, could be the best option. 

Updating Beneficiary Designations

An estate planning attorney can help you ensure you have updated all your estate planning documents after a significant life change. For example, if you've recently remarried and are part of a blended family, you may still need to update your beneficiary designations on your retirement accounts and insurance policies. For example, your ex-spouse may still be the beneficiary of your life insurance policy, 401(k), IRA, or other investment accounts. 

Even if you have divorced your former spouse and remarried, if your former spouse is named as a beneficiary, he or she will be entitled to the assets in the account. Regardless of what your last will and testament or trust agreement states, if an ex-spouse is named as your beneficiary, he or she will become the owner. Family dynamics can become challenging if a remarried spouse neglects to remove the former spouse's primary beneficiary. 

Another common error happens when a spouse names his or her current spouse as the primary beneficiary and his or her children from a former marriage as equal contingent beneficiaries. This may seem like a way to ensure everyone receives some assets. In reality, the primary beneficiary will receive all the assets and be free to distribute them as he or she wishes. 

Attorney Christopher Heritage can help you understand your options for naming beneficiaries. You may avoid a potential problem by naming each beneficiary as a primary beneficiary and designating the specific percentage of the asset each person will receive.

The Benefits of Prenuptial Agreements for Blended Families

A prenuptial agreement can help a blended family significantly. A well-written prenuptial agreement is a legally binding contract that states how the marital property will be divided if the spouses divorce. For example, if the intent is to keep you and your spouse's assets separate so you can each pass on your inheritance to your own children, your prenuptial agreement can support that plan. 

However, a prenuptial agreement shouldn't be considered a replacement for a comprehensive estate plan. Attorney Christopher Heritage can help you ensure that the terms of your prenuptial or postnuptial agreement align with your estate plan, preventing a potential court battle for your beneficiaries.

Discuss Your Blended Family Estate Plan with a Skilled Attorney