We always emphasize the fact that personalized legal attention is the key to a properly constructed estate plan. Every case is different, and there is no cookie-cutter, one-size-fits-all approach that is right for everyone.
This definitely enters the picture when it comes to estate planning for blended families, and we will provide six pieces of insight in this post.
A simple will won’t cut it.
On the day that you are getting married, you are naturally going to be optimistic about the future or you would not be making the move. If you think that you simply need a will that will leave everything to your new spouse, you are taking a big risk.
How can you be sure that your marriage will withstand the test of time? Plus, even if you and your spouse stay together, are you absolutely certain that your spouse will take care of your children properly if you die first?
There is a better option in the form of a qualified terminable interest property (QTIP) trust. To take advantage of this estate planning tool, you fund the trust, and you name a trustee. Your spouse would be the first beneficiary, and the children would be the successor beneficiaries.
If you predecease your spouse, the trustee would distribute the trust’s earnings to your spouse, and your spouse would be able use property that is owned by the trust (like your home). Your surviving spouse would be provided for appropriately, but they would not be able to change the terms of the trust.
After your passing, your children would become the beneficiaries of the trust. This is a very effective estate planning approach for many blended families.
Choose the trustee wisely.
You should be very discerning about the choice of trustee because this is a sensitive position. A trustee has a fiduciary duty to follow your instructions as the grantor and protect the interests of the beneficiaries. However, difficulties can arise when a person with a personal stake in the family is acting as the trustee.
Trust companies and the trust departments of banks provide trustee services for a fee, and this can be the best choice in many cases. When you have a professional at the helm, you can be certain that the trust will be administered properly and dispassionately.
Consider the fact that your spouse may remarry.
It can be hard to wrap your head around the idea of your spouse remarrying when you are creating an estate plan on the way into a marriage. At the same time, most second and third marriages do not withstand the test of time for one reason or another.
You should definitely keep this in mind when you are making inheritance planning decisions at the outset.
Consider giving direct inheritances to your biological children.
The qualified terminal interest property trust is a good solution, but the dynamic can be a bit awkward for the surviving spouse and the children. To break this ice, you may want to arrange for your children to receive some of their inheritances immediately after your passing.
Attend a Free Webinar!
We do everything possible to provide educational opportunities to members of our community. You can learn a lot if you tap into all the different written materials that we have on this website, and we go the extra mile through our special events.
The dates and more information can be found our events page, and you can follow the simple instructions to register if you decide to join us.
Are You Ready to Act?
If you are on this site because you know you should work with a Smithtown, NY estate planning lawyer to create a plan, there is no time like the present. We can gain an understanding of your situation and your objectives, and we will make recommendations based on the circumstances.
At the end of the process, you will walk away with a custom crafted plan that ideally suits your needs. You can schedule a consultation appointment right now if you call us at 631-265-0599, and you can use our contact form if you like to send us a message.
- How to Maximize the Benefits of Charitable Gifting in Your Estate Plan - February 14, 2024
- 2024 Medicaid Guidelines for New York Seniors - February 7, 2024
- Young Adults and the Importance of Estate Planning - January 31, 2024