Today there are over 20,000,000 blended families in the United States. It is not uncommon to bring together not only children of a previous marriage but also assets. Today, more than ever, with the changing tax laws it is critical to understand the implications with regard to your objectives, recognizing potential conflicts and the decisions that you make regarding those you care about most.
Some questions to consider with regard to how you might plan to ensure everybody is taken care of the way you intended:
1) What is the importance of providing for your children from a previous marriage to ensure that they will receive their inheritance in a timely manner?
2) What is the importance of avoiding conflict between your previous family and your current family with regard to how your estate will be distributed?
3) It is unwittingly possible, to provide for your ex-spouse, the control over your children’s inheritances. Is this an outcome you would be comfortable with?
Further questions to consider in order to develop the necessary structure when discussing your objectives; please consider the following:
1) Are there children from a previous marriage you wish to provide for?
2) What, if any, concerns might you have over your spouse’s ability to manage inherited assets?
3) Which family members do you wish to include in the distribution of your assets?
4) Are there any potential conflicts within the family which may require additional sensitivity?
5) Are there specific, and if so what are they, financial objectives regarding each family member; i.e., medical bills, retirement, education funding, etc.?
You may be questioning at this time why it’s important to have an estate plan for your blended family. Avoiding planning will allow the state that you reside in to oversee how the assets are to be distributed. In order to avoid the state from interfering with your desired goals, it is important to consider the above questions and then implement a plan that will provide for all family members.
It is possible that children from a former marriage may not inherit directly from a biological parent if he or she is the first to die. If the goal is to provide for the children of your first marriage in a more timely manner, especially if the children are close to the age of a new spouse, then planning for this contingency is paramount as it is possible that the children may never inherit due to their close proximity in age to the new step-parent.
It is not uncommon to inadvertently leave an inheritance to an ex-spouse as a custodian of minor children. This could be disastrous if you fear the ex-spouse will mismanage the inheritance or potentially spend the money initially intended for your children’s livelihood.
The advantages of having an estate plan for a blended family will allow family members to provide for previous and current family in a fair and timely manner.
Family members will be able to control the way they receive their legacy and it may avoid conflicts among the remaining family members.
Now is the time, especially with tax laws in a state of flux, to review your plan, making sure that it meets all of your goals and objectives.