Estate Planning for Second Marriages, Blended Families & Secret Families
Second marriages and blended families present their own issues when it comes to estate planning. You would like to take care of your spouse and your children, but letting them work it out after you are gone is a recipe for disaster. Once you have been through a divorce, you understand that “happily ever after” isn’t always. Fortunately, estate planning that takes into account your unique family situation can alleviate most of your concerns, allowing you to freely pursue your second chance at happily ever after.
Are You Asking Yourself “How can I make sure my assets are distributed correctly?”
Clear the Air
When it comes to estate planning for a blended family, the concept of “yours, mine and ours” can complicate the process to the point that family dynamics become permanently strained. According to Forbes, Such situations require advance wealth planning with clear goals. “The biggest issue in blended families is, ‘where does my money go when I die?'” The first step is to have an honest conversation with your new spouse about your existing finances, goals for the future and how you expect your assets to be distributed. These conversations can be difficult and emotionally-charged, but they will reap innumerable rewards in the long run. If your children are adults, you may also want to include them in these discussions so that everyone knows what to expect. Huffington Post suggests consulting with an estate planning attorney prior to remarriage to assess your options. But, if you have said “I do” again, it is not too late! The most important thing is to do something. Don’t let the state determine how your assets will be distributed.
Update Beneficiary Designations
“One of the biggest mistakes people make when determining who will inherit their assets is in the beneficiary designations on retirement accounts and insurance policies,” said Ranzau. “The best-laid estate plan can be destroyed by an incorrect beneficiary designation.” That’s because beneficiary designations trump everything else, RBC Wealth Management noted. Regardless of what a will or trust says, the asset goes directly to the primary beneficiary or beneficiaries. Another error occurs when a spouse names the current spouse as primary beneficiary and the children as equal contingent beneficiaries, believing that everyone will get something. In truth, the primary beneficiary receives all the assets in this situation and will be free to act as he or she wishes. If your estate plan is written correctly, you’ll have no problem distributing your assets.
Secure your Assets
The biggest concern in second marriages is ensuring that each spouse’s share of the estate ultimately ends up with his or her desired beneficiary. That is, if each spouse has children from other relationships, those children’s inheritance is protected even if their parent is the first spouse to die. Traditional estate planning distributes an estate to the spouse and then the children. But, after the first spouse dies, the surviving spouse can easily amend the documents to disinherit whomever he or she chooses—including the deceased spouse’s children! If one of you brings significant assets to the marriage, it may make sense to prepare a separate property trust, before you get married to ensure that those assets ultimately end up with your chosen beneficiaries, suggests Huffington Post
Are You Ready to Have Peace of Mind About Who Receives Your Assets?
Every blended family is different and each presents its own set of challenges, both legal and personal, but a trusted attorney like The Law Offices of Joel A Harris can help guide you through the process catered to your individual needs. Throughout the process, we explain everything and patiently answer every question you may have. Since 1993, The Law Offices of Joel A Harris has worked tirelessly to assure individuals receive the most beneficial Estate Trust Plan for their loved ones. We love providing peace of mind! Feel free to reach out to us at (925)757-4605.