If you are remarrying and have children from a previous relationship or if you are entering into a marriage with a person who has children, it’s important to think about the impact your new family may have on your estate plan. No one wants to find out after you’re gone that your ex will receive the entirety of your estate because you neglected to update your documents.
One estimate claims that at least half of all couples in the U.S. eventually divorce. It’s estimated that most of those people will eventually remarry. With that in mind, here are three estate planning considerations for blended families:
1. You may need more than a simple will
A basic will that leaves everything to your spouse may be ideal for an older couple with no children. However, if either of you has children of your own, or if you decide to adopt your spouse’s children, a basic will may leave them empty-handed.
If you pass away before your spouse, they are under no obligation to distribute any assets beyond what you’ve outlined in your simple will. They could very well opt to keep all of your estate to themselves or to distribute it only among their biological children. You should give some serious thought to a more comprehensive estate plan.
2. Consider creating a trust
Don’t believe that trusts only benefit the wealthy. A trust can be a useful tool for people in all income brackets. When you put your assets into a trust, the trust will effectively “own” these assets. However, if you name yourself the trustee, you will still be able to manage those assets. This can provide you with a degree of control and protect your assets should you ever require long-term care.
3. Decide who you want to make healthcare decisions on your behalf
Even if you’ve never created a will or have set up a trust, you might have an advanced health care directive or power of attorney. You might wish to rethink who you’ve named to make decisions on your behalf. If this person doesn’t get along with your new spouse or other family members, they may effectively cut them out of your life when you’re at your most vulnerable. It’s important to name someone who will not only act in your best interest but who will also consider the interests of those you love.