Estate Planning Considerations for Blended Families
Real-life blended families are not always this close, and they don’t always share the same values and goals. There is a high potential for conflict between members of a blended family when a parent becomes incapacitated or passes away.
The estate plan of a blended family can minimize the chances of stress and conflict after you are gone while providing for both your children and spouse. An experienced estate planning attorney can help you get your affairs in order and ensure the property is dispersed as per your wishes.
Creating a Trust
Married people usually leave everything to each other through their wills. This means that your spouse will own all your assets and property outright if you pass away first. A major issue with this scenario is that the other husband or wife may not leave anything for children from a previous marriage.
Setting up a trust is a great way to provide for your spouse without leaving out your own kids. You can choose to place a part or all of your property in the trust in such a way that your spouse is able to manage it. But when your spouse passes away, you can designate some or all of the property in the trust to go directly to your children.
You will need to choose someone to be the trustee once you die. Your kids and spouse may have competing goals resulting in family conflict. It’s best that you pick a neutral trustee, such as the bank.
Life Insurance and Retirement Accounts
Life insurance is another way of providing for a complex family. You can always take out a life insurance policy and name your children as the beneficiaries. This way, you can still leave most of your property and money to your spouse while ensuring that your children receive an immediate inheritance.
It’s critical to understand that IRAs and 401(k)s among other retirement accounts go directly to the primary beneficiary instead of being passed down through the probate process. This is true for life insurance as well.
Make sure you update your beneficiaries in the life insurance policies and retirement savings if you are divorced. The money will be given to the primary beneficiary even if the will says otherwise.
Powers of Attorney and Living Wills
You should have a document that explains your wishes if you become terminally ill. This is known as a living will and should be part of your estate plan.
This document designates a healthcare power of attorney to make medical decisions when you are unable to do so. You can also name a durable power of attorney as part of the living will to handle all your financial affairs if you can no longer.
In a typical family dynamic, people automatically name their spouses in the living will. This can be difficult in a blended family since children from a previous marriage may not acquiesce to what the new mom or dad wants for their parent.
It is a good idea to choose someone who is balanced and trustworthy to carry out your wishes as your power of attorney. You should also let everyone in your family know about your wishes and plans in advance to avoid any surprises that might lead to conflict.
Without an estate plan, the property and money that should normally get disbursed through a will is divided as per Kentucky’s intestacy laws. This means you won’t be able to dictate the way in which the property gets split between your children and spouse.
Estate Planning Tips for Blended Families in Kentucky
You should be as thorough as possible with your estate plan. You should let your family members know of your plans so that there is no conflict later on. There are several options that can be used to provide proper financial support to your children once you die. It’s best that you have an experienced estate planning attorney understand your wishes and draft ironclad documents.
Prenuptial agreements before remarrying can also be helpful in the case of blended families. You should also revisit the estate plan that you draft every 3 – 5 years. This will ensure that everything is updated and as per your wishes. It is vital that your estate plan accounts for all members of your blended family as well, including new children or grandchildren.
Parents should take special care while nominating guardians and dividing assets. No two members are the same in a blended family, and along the same lines, no two estate plans will look exactly alike. This is why it is critical that you have a qualified attorney take care of your estate planning instead of using online templates.
Get a Reputable Kentucky Estate Planning Attorney on Your Side
The skilled and knowledgeable estate planning attorneys at John H. Ruby & Associates have the necessary experience and resources to take care of all your estate planning needs. Our attorneys will give you the attention and dedication necessary to ensure that your needs and goals are fully addressed.
To schedule your free consultation, call us at (502) 895-2626 or fill out this online contact form.