subject: Estate Planning for Blended Families [print this page] Estate Planning for Blended Families Estate Planning for Blended Families
Because so many families have children from more than one marriage, estate planning for blended families has become a common challenge in the estate planning world. How, for example, do you ensure that your children from a previous marriage will benefit from your assets if you die first?
Once those assets pass to your new spouse, it will be his or her estate plan that determines the distribution not yours. Your home for example, or your retirement funds, may pass directly to your spouse and bypass your children altogether. Then, when he or she dies, the income from those assets would likely pass to his or her children alone your children would no longer have a claim to the estate. Obviously this can be a little worrisome; after all, you worked hard for what you have accumulated in life and you want your own children to benefit from what you have done.
Protecting Your Children's Inheritance
You could coordinate your Will with your spouse to be sure that all children benefit from the estate as a whole. Of course, after you've passed on, there's nothing to stop your spouse from updating the Will and leaving your children out.
The best method, then, would be to set up a Trust. The assets you want to pass to your children after your spouse's death can be left to a trust, instead of to your spouse. With a trust, your spouse can have limited access to your assets, but will not be able to deplete them or leave them to someone else in a separate Will.
If you will be using a 401k or other retirement plan to fund your trust, you'll need to have your spouse sign a waiver stating that they accept the trust being named as the beneficiary to these assets.
This type of planning can be quite complicated so it's best to seek the assistance of a qualified estate planning attorney to be sure all your heirs are properly protected.
