Careful estate planning can help protect the inheritance of children from previous marriages. Some of these steps include giving assets directly to children, creating a trust for the children, and purchasing life insurance for the children.
Parents who remarry later in life face the challenge of protecting their children’s inheritance. They may worry, “What will happen to my son or daughter from a previous marriage, if I pass away before my spouse?” Careful estate planning can solve some of these issues and ensure that both the current spouse is provided for and that the children receive a portion of their parents’ legacy.
Give the money or assets directly to your children
One way to safeguard your children’s inheritance is by giving it to them directly. You can gift the money or assets to your children in your Last Will and Testament. You could also give the money to them while you are alive; which also allows you to watch them appreciate and enjoy their inheritance. It is important to note, however, that the current estate and gift tax may affect any direct financial gifts.
Create a trust for your children
By creating a trust for your children, you can ensure that there are money or assets available for your spouse during his or her lifetime, with the remainder distributed to your children upon the death of your spouse. There are several ways to set up this kind of trust concerning who receives the net income of the trust, who can take money out of the trust (and when, how much), as well as set specific distributions to your spouse or children. Just be careful about the trust language, especially whether it will pay for the surviving spouse’s long-term care (which could end up depleting the trust before your children have access to it).
Purchase life insurance for your children
If you plan on leaving your estate to your spouse, either outright or in a trust, an alternative could be purchasing life insurance for your children. You can make them beneficiaries or partial beneficiaries to assets not governed by a will, such as insurance policies, IRAs, or 401(k) policies. If you decide to go this route, it is important to know that you may need your spouse’s permission to name your children as beneficiaries of some of these policies.
If you want to protect your legacy for your children, it is a good idea to take the additional steps to create an estate plan. It will give you the peace of mind knowing that both your spouse and your children will be protected and provided for. If you are interested in setting up a consultation, contact Siedentopf Law via our website at EstateLawAtlanta.com or by calling (404) 736 – 6066.
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