Importance of Estate Planning for Blended Families
Did you know?! Forty percent (40%) of all U.S. families are blended. So what is a blended family? This is when at least one partner has a child from a previous relationship before marriage.
I personally come from a blended family (hello, all ye siblings if you're reading this!), and I have plenty of friends and relatives with blended families. If I had to guess, I’m pretty sure you know plenty, too (or you may come from or have a blended family yourself, perhaps!).
As the statistic above points out, blended families are not out of the ordinary. Embarking on a new chapter and expanding your family is exciting!
There are certain matters, though, that you need to take into careful consideration to help avoid potential family conflicts in the future.
So let's chat about it!
An estate plan helps in dealing with competing interests arising from blended families.
Let’s be honest–-in many situations, blended families can mean competing interests, particularly among the children. I am not saying that people within blended families naturally do not get along. "Competing interests" doesn't have to mean giant fights or strained relationships. For example, a competing interest can even be as simple as two children (one from a previous marriage and one from the current one) both needing money for college.
Here’s the usual scenario:
Most married people usually leave all their assets to each other in their wills, with the intent (but not assurance) that the surviving spouse use those assets to help provide for any kids they share and leave the remainder to those children at their death. But what if the surviving spouse remarries and has more kids? Without intentional planning, children from the first marriage might end up getting nothing from the hard-earned assets of their deceased mom/dad.
As a parent, surely, you would not want that!
Solution? Estate planning!
Why? Because it puts YOU in the driver's seat and allows you to make a plan to provide for your children the way that YOU want.
In particular, using a trust agreement in your estate plan would allow you and your new spouse to protect the interests of any children from your previous relationships. A trust acts as a safe place for your assets, both during your lifetime and after you pass away. Usually, trusts in blended families will contain specific provisions that ensure children from a previous relationship are provided for. If your spouse survives you, they can still be in charge of managing the trust (as trustee), but certain properties, money, or other belongings are set aside for the benefit of your children. As I have already said in my earlier blog posts: estate planning = peace of mind.
What about children from the new marriage, you say? Estate planning protects them, too, of course!
An estate plan keeps up with your new familial status, including updating your beneficiaries and assets. Marrying again, of course, involves introducing new people to your life–spouse, kids, stepchildren in some instances. Making an estate plan allows you to reserve some of your money and properties to your new family, so that no one gets left out during the partition of your estate.
If, before entering this new chapter of your life, you already have a will prepared, an estate plan is a perfect way to update how you want your estate divided given your new familial status. Not dealing with these updates and changes may result in some loved ones not inheriting anything, even if you had wanted to set aside certain properties or a certain amount for them. Letting your state’s succession laws decide for you can sometimes lead to the omission of some of them in the settlement of your estate–I’m pretty sure this is something you and your families would not want to happen.
Want to get started in estate planning? Sign up for a virtual consultation here. No worries—this consultation is casual, no-pressure, and absolutely free! I would love to hear from you and help you out as you secure your families’ futures.
You can also contact me by clicking this link.
‘Til my next post!