Estate planning attorneys always give clients a heads up from the beginning. This is not a “one and done” process in most cases if you put a plan in place relatively early on. The only certainty in life is change, and evolving circumstances can trigger the need for estate plan updates.
Changes in marital status certainly fit into this category. If you get married, you will have a different dynamic to address. Divorce fits into the same category, and remarriage after you have children is another example.
In this post, we will take a look at four things you should know about blended families and estate planning.
Careful Consideration Is Key
Before you do anything else, you should sit down by yourself and do some thinking. What do you want to accomplish with your revised estate plan? You should list your priorities, even if you do not know exactly how to make your wishes come to fruition.
Communication Can Prevent Future Problems
You can potentially enter into a marriage with a plan in place that was not constructed in coordination with your new spouse. However, this can potentially cause problems in the family later on. In the end, it is up to you, but honest communication can go a long way.
There Are Effective Tools
There are commonly used estate planning devices that can be used to effectively respond to situations that appear to be challenging on the surface. For example, when it comes to blended families and estate planning, a qualified terminable interest property trust (QTIP) can provide a solution.
Let’s say that you have two grown children from a previous marriage, and you have done very well financially. You are getting married to someone that is younger than you are, and it is statistically likely that you will die first.
Your objective is to make sure that your new spouse is provided for appropriately in your estate plan. At the same time, you want to be certain that your children will receive the inheritances that you would like to leave to them.
Under these circumstances, you could establish a qualified terminable interest property trust. First, you name a trustee to serve as the administrator, and you fund the trust. Your spouse would be the initial beneficiary, and your children would be the successor beneficiaries.
If you predecease your spouse, they would receive distributions of the trust’s income for the rest of their life. The trustee could also be given the latitude to distribute portions of the principal. In addition, your surviving spouse could use property that is held by the trust.
They would be secure and comfortable, but they would not have the ability to change the terms of the trust. After their passing, your children would become the beneficiaries.
This is an example of an estate planning tool that can be used to address a particular objective.
Legal Counsel Is Invaluable
The last thing that you should know about blended families and estate planning is really the most important. As a layperson, you are simply not going to be aware of the different ways to proceed. When you work with our firm, you will receive the personalized attention you need to make the right choices.
We can gain an understanding of your financial position and your overall family dynamic. After we know your objectives, we can provide recommendations and answer all of your questions. At the end of the process, you will emerge with a tailor-made plan that ideally suits your needs.
If you are ready to get started, you can schedule a consultation at our estate planning offices in Glastonbury or Westport, Connecticut if you give us a call at 860-548-1000. There is also a contact form on this site you can use to send us a message, and if you reach out in this manner, you will receive a swift response.