Today’s modern family often looks a little different than it once did. While the nuclear family once meant two parents and their children, things are more blended these days. As people get married, divorced, and remarried, they often wonder about their estate planning duties and how to update their plans as their lives change. Any time a parent passes away or becomes incapacitated, there is potential for conflict between the surviving spouse and the children.
If you are hoping to avoid conflict and minimize these kinds of issues, a well-crafted estate plan is a must-have. Here are some tips to employ as your blended family comes together:
Married couples often leave their assets entirely to their spouses. This is often problematic for blended families, as the surviving spouse may opt not to share their assets with children from the subsequent spouse’s previous relationship. There are ways to provide for your spouse while also ensuring that both spouse’s children are taken care of. By placing your assets in a trust, you ensure your wishes are carried out.
When setting up a trust, you designate a trustee to manage your affairs when you pass away. If you are concerned about your family competing for their individual best interests, you can select a neutral, unbiased party as your trustee known as a corporate trustee. A bank or attorney are both excellent options. Basic will-based planning always poses a threat for children of one spouse to be disinherited if the surviving spouse updates their plan.
Life insurance policies and retirement accounts are other great ways to provide for your loved ones after you have passed. Too often, though, the beneficiaries listed on such accounts were chosen long ago, before divorces happened and kids entered the picture. If you do not want the risk of your loved ones going through lawsuits to recover your accounts that have outdated beneficiary designations, make sure to update your beneficiaries as soon as possible.
Create a document that outlines your wishes should you become terminally ill or incapacitated – also known as a living will. While you are at it, set up a medical power of attorney that designates an individual to make medical decisions on your behalf. A statutory durable power of attorney is also an essential document that can help ensure your financial affairs are handled when you are unable to make decisions.
Frequently, people choose their spouse for these roles. Depending on whether you have adult children, you may need to consult with them and your spouse to know who will be the most capable of following through with your wishes. Do your best to select a level-headed, even-keeled individual to represent your best interests. Prevent surprises by alerting your family to your choice well before you need to.
Every family is different, but Hegwood Law Group has extensive knowledge in how best to protect you and your loved ones. If you and your spouse are concerned about your existing estate plans (or lack thereof), call us at (281) 885-8826 or schedule your consultation online here.