If you do not leave a specific, legally executed estate plan with the appropriate documents, then you are leaving it up to your state to decide how your resources are distributed. This could make things quite difficult for your heirs (at least for the people whom the law determines are your heirs if you didn’t name any.)
And when you are becoming a stepparent or blending your family with another person’s family, it is especially important to consider estate planning. While it isn’t romantic, it can make things smoother down the road. As you can imagine there are a number of uncomfortable scenarios that can result when people blend families and do not consider finances.
“Estate Planning When You Have a Stepfamily,” from ElderLawAnswers.com noted:
“Married people typically leave everything to their spouse, so children from the previous relationship may now see their inheritance go to their stepparent, who may in turn leave it to his or her own children. Even if the stepparent promises to take care of the stepchildren, it doesn’t always work out that way. And if additional children are added to the relationship, things can get even more complicated. “
And on the other end of the spectrum, children can inherit money and property and leave a spouse with few financial resources.
The time to consider this may be before you remarry so you and your future spouse are in agreement about how to proceed. However, if you didn’t do any estate planning before blending families, you can take it on now. Even if you did you would still have to revisit your estate plan to make sure it was current or to adjust it as needed.
ElderLawAnswers.com offered some options that partners in blended families employ including:
- Making the children beneficiaries of a life insurance policy
- Leaving something to the children when a spouse is getting most of the estate
- Creating a trust to benefit both spouse and children—for example a trust could be set up so the spouse has it during their lifetime and then the rest could go to the children