It’s important to update your estate plan as soon as possible after a divorce or remarriage in order to avoid future conflicts about assets. Unfortunately, many people don’t take the time to update important documents after a divorce or remarriage. Having a blended family can create a unique legal situation when it comes to wills, estates, and beneficiaries. An experienced attorney can guide you through the steps needed to update your estate planning roadmap.
Here are four important pieces of information to help you understand all the intricacies of estate planning for blended families.
1) Review beneficiaries, accounts, and documents
The first step for your blended family estate plan is to review your current assets, including:
- Bank accounts, including savings accounts
- Insurance Policies
- Retirement Accounts
Be sure to check these for beneficiary designations and ownership. This is important for everyone to do, but especially if you’ve been through a divorce. Often, when people get divorced and remarried, they forget to change ownership status of assets they once shared with a former spouse.
As a result, assets such as joint savings accounts will end up going to the former spouse, even if the will leaves it to the new spouse.
Many people don’t realize that joint ownership statuses or beneficiary designations will override a will since these assets do not go through probate! That’s why you should make sure these are in order before even writing your will.
In fact, since relationships sometimes change , it’s good practice to update beneficiaries every few years even if you are not divorced.
2) Evaluate Your Goals
Stop and think about how you really want your assets to be distributed. You’ll likely want to find a way to make sure your spouse is taken care of, while still making sure your property is ultimately bequeathed to your biological children. If your spouse has children of his or her own, things may get even more complicated as you consider what role (if any) your step-children will play in your plans.
Some special factors you may want to consider in your blended family estate plan include:
- The value of your estate, your spouse’s estate, and your shared property
- Whether one or both of you has children from a prior marriage
- Ages and financial situations of children from prior marriages
- Specific needs of your spouse versus those of your children
- Your spouse’s relationship with your children from a prior marriage
- Pre-marital or post-marital agreements
- Family heirlooms and valuables
- Alimony or child support – if applicable
- Guardianship of minor children – if applicable
- Factors that affect estate taxes
- Who you’d like managing your assets if you become incapacitated before death
Each blended family situation is unique, so you should carefully consider different factors that may play into your estate plan.
3) Talk it out
Once you’ve established your goals based on different considerations, make sure you communicate your plans to those closest to you, including your spouse, older children and any ex-spouses who may still be involved. Be ready to answer any questions or address any concerns they may have so that there is no confusion or ambiguity. It’s important to ensure that your loved ones will be on board to avoid conflict in the future.
4) Set up your estate planning team
Once you’ve discussed your plans with your loved ones, it’s time to set up your estate planning team, which will be responsible for carrying out your plan after your death. This group should be made up of loved ones and professionals including:
- Estate planning lawyer
- Financial planner
- Insurance agent
- Power of attorney
- Spouse and ex-spouse (if necessary)
- Adult children
- Close friends and relatives
Many people make the mistake of relying only on their spouse and close relatives to carry out their final wishes, but it is essential to have a combination of loved ones as well as professionals. Professionals like an estate planning attorney can not only help you keep small details from slipping through the cracks, but they can even save you money by helping you find the best ways to avoid heavy estate taxes.
An experienced estate planning attorney like Christina Lesher can guide you through the complex situations associated with blended families, and help you create a customized plan for your unique family. Contact Ms. Lesher’s office today at 713-529-5900 to learn how you can get started on the road to planning for your family’s future.