Life throws curveballs and you may find yourself with a mixed family, a spouse, an ex-spouse or two, children from each spouse, adopted children, and other loved ones, all of whom you want to remember in your estate. Regular intestate succession and even simple wills are not designed to handle blended families and the complicated dynamics that make them work. This is a situation where an experienced estate planner can help.
Trusts and Delayed Inheritance
Children from a previous marriage may be much older than the children from a second marriage. Further, a second, younger, spouse may have a much longer life expectancy. Balancing the needs and expectations of each of these factors will be key. After all, you undoubtedly want to take care of a surviving spouse, but older children may not want to wait until your second spouse dies to receive their full inheritance.
It’s important to take the time and consider your goals for each individual you plan to leave bequests to in your estate. You want to take steps to ensure that your spouse is taken care of but your children are not disinherited in the process or that your new spouse spends all the assets of the estate before your children inherit.
The Spousal Share
Your spouse at the time is entitled to a share of your estate, regardless of whether they are named in the will. An older will may name an ex-spouse and children as beneficiaries and not take into account at all the new spouse and only new children if your will anticipated future children. This can cause problems between and old and new family, especially when a new spouse takes a significant share of the assets. It is better to consider these problems up front and set up appropriate mechanisms to care for all children and your new spouse. This can be handled with life insurance, for example, or trusts, where the spouse is provided for outside of your estate and waives their right to the spousal share in return.
Strategies for Blended Families
There are a number of ways to handle the needs of blended families. In addition to life insurance, there are also long term care insurance policies that can be used to fund unexpected and expensive end of life care, preserving the assets of the estate for the children.
Trusts set up to fund a spouse during their lifetime and then disburse on that spouse’s death can have clear guidelines on permissible distributions and a third party trustee who is looking after the best interests of both the spouse and the future beneficiaries. The trust can also be structured such that the spouse only receives a percentage of the distributions.
At Dunn Law Firm, we want to make sure your estate plan is comprehensive and includes all the details necessary to protect your assets and distribute them to your family and loved ones the way you want them to go. We will advise you on how best to structure your estate to meet your goals. To learn more, reach out to the Dunn Law Firm by calling (435) 628-5405 to set up a free consultation today.