Fifty years ago, the typical American family consisted of a man, woman and 2.5 children. In contrast, today’s American families readily include same-sex couples, divorced spouses, step-children and half-siblings. A more complex familial structure requires individuals to view and approach estate planning differently.
For example, when a man and woman who both have children from previous marriages decide to marry there are a number of factors that must be considered with regard to finances and estate planning. The couple must decide whether to keep the assets they bring to the marriage separate or to pool assets and include old and new assets as marital property. The couple should also take steps to revise individual wills to ensure each spouse’s biological children are accounted and provided for.
In some cases, blended families may choose to rely largely on beneficiary designations to accomplish estate planning goals. If this is the case, it’s wise to ensure documents are updated to remove an ex-spouse or include a new spouse or adult child.
In addition to beneficiary designations, trusts are commonly used by blended families to provide for both a surviving spouse and children. The terms of a trust can be tailored to meet the needs of an individual’s unique family. Trusts are often a good option for parents who want to provide for a minor child or ensure a child is mature enough to manage an inheritance. Likewise, a trust can include provisions and restrictions to encourage or discourage certain behaviors.
Providing for the members of a blended family via estate planning can be tricky. An estate planning attorney who has experience handling complex estate plans can provide advice and assistance to help ensure an individual achieves his or her estate planning goals.
Source: Green Bay Press Gazette, “Carissa Giebel column: Estate planning for blended families,” Carissa Giebel, Jan. 27, 2014