Estate Planning Tips For Blended Families
Summary: While it may not always be easy navigating multiple family members and complicated relationships, careful estate planning can help ease potential legal and financial issues in the future.
Blended families are more common in the U.S., with approximately one in six children living in a household with a step-parent, step-sibling, or half-sibling (Source: Pew Research). While it may not always be easy navigating multiple family members and complicated relationships, careful estate planning can help ease potential legal and financial issues in the future. Siedentopf Law has some tips for those who are considering estate planning for their blended families.
1. Include family members in your will
A simple Last Will and Testament that leaves everything to your current spouse may open the possibility that your children from a previous marriage could be cut out of your estate. In other words, the current spouse may feel no obligation to children that are not biologically his or her children. Instead, it is a good idea for the person who is creating the will to specifically include everyone who he or she considers family, especially following divorce or re-marriage, and to make specific provisions for them. For more, watch our video on What Happens To Your Will If You Divorce.
2. Check your beneficiary designations
Beneficiary designations, which provide a mechanism for the transfer of assets, are commonly found on life insurance policies, retirement accounts, and even some bank accounts. The person creating the account or policy can identify a beneficiary and, after he or she passes away, the account assets will be paid directly to the beneficiary. Just as important as naming an appropriate beneficiary is making sure to review and update those designations, especially after major life events such as marriage, births, divorce, or death of loved ones. Georgia law does not automatically revoke beneficiary designations upon divorce, as some states do. Making sure your designations are current means that your wishes will be honored as you intended. For more, read our blog on The Importance of Updating Your Beneficiary Designations.
3. Consider creating a trust
A spouse who wants to provide for their blended family may want to consider creating a trust that provides assets for his or her surviving spouse to use during their lifetime, with the balance passing to any biological children after the surviving spouse’s death. This way, the surviving spouse will have a source of income for the rest of his or her days, and the remaining assets will ultimately pass to the children. A trust can also ensure that any assets are protected if the surviving spouse were to remarry. When choosing a trustee, however, you might want to consider naming multiple trustees, or naming an experienced and knowledgeable trustee who will invest properly and who is willing to potentially act as a referee for members of the blended family.
4. Carefully select a health care decision maker
A medical decision maker, also known as a health care agent or power of attorney for health care, is the person who will make decisions about your medical care if you are unable to make those decisions yourself due to injury or illness. Medial decision makers can look at your medical records, speak with your doctors, and make decisions about any medical testing or treatment. These individuals can potentially have major responsibilities, and as such, it is important to select the correct person. For blended families, you want to make sure that your medical decision maker is someone you trust who is willing to referee access and information as necessary. For more, you can read our blog on how to choose your medical decision maker.
5. Consider Life Insurance
Life insurance is one way to ensure that a current spouse is able to enjoy your marital home and assets (without strings) and still make sure that all of the children are provided for. A life insurance policy can name children as beneficiaries, allowing them to receive money immediately upon the death of the parent. Note: this process is more complicated if the children are still minors. With a policy, other assets can be left to the spouse outright and without the need of a trust – because the children have been taken care of separately.
6. Discuss funeral plans with family members
While this might be a difficult or awkward conversation to have with loved ones, it is a good idea for individuals who have blended families to discuss their final wishes. For example, does he or she wish to be buried with a current or former spouse? Would they prefer their children (and not their spouse or former spouse) to decide what happens for the funeral? When a person expresses their wishes and everyone knows what to expect, this can help avoid future stress or hurt feelings.
When it comes to estate planning for blended families, communication is key. If you have additional questions about estate planning or if you would like to set up an estate planning consultation, contact Siedentopf Law via our website at EstateLawAtlanta.com or by calling (404) 736 – 6066.
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