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Estate Planning for Blended Families

Estate planning requires much careful consideration. Estate planning for blended families can be even more tricky, as it presents special challenges.


Communication is Critical


The start of the estate planning process should involve an honest discussion between you and your new spouse about your desires when it comes to future asset distribution. This discussion is not a one-time talk, as your goals and needs are likely to change over time, and with such developments, changes to your estate plan may be necessary. Another important element of communication with your new spouse is letting each other know about assets like 401k plans and life insurance policies.


The Will


A will, properly formed and executed, can ensure that your assets pass to the people of your choosing, according to your wishes, upon your death.


Sometimes a person gets married, has children, and executes a will. At a later date, that person finds himself or herself no longer in that marriage, but in a subsequent one. Perhaps the person's new spouse has children that he or she is bringing into the new marriage and family. This is an important time to consider updating a will and estate plan, as circumstances have changed.


What should you do when this happens? Start by creating a list of all your tangible and intangible assets. There will be many, including things like your home, real estate, investments, jewelry, old photographs, and family heirlooms. In your updated will, you can direct who should receive your property. For example, you may have a locket that belonged to your mother, and your daughter was close to her. This asset has particular emotional value to your daughter, so you should specify in your will that it goes to your daughter upon your passing.


Common Estate Planning Issues With Blended Families


Suppose you simply leave all your assets to your new spouse upon your passing. Your spouse then has the power to do as he or she wishes with those assets. Consider what could happen if one or more of your children from a previous marriage is not on good terms with your new spouse. Your spouse could decide to create a subsequent will that prevents your children from inheriting property you would have wanted them to have.


You may want to make a distribution to your current spouse in a trust with the assets administered by an independent trustee. This can provide you assurance that assets you wish to eventually pass on to certain of your children eventually are, while also providing for your spouse during his or her lifetime.


If there are certain assets that you have determined your spouse will not require during his or her lifetime, but which you want to ensure are passed on to certain children, you may want to distribute those particular assets immediately at the time of your passing.


Minor Children


Minor children are treated differently than adult children in estate planning, and require special consideration. A child under the age of 18 cannot legally control assets. If you want a particular person to be a child's guardian (the person who will manage the minor child's assets until that child reaches 18), then you should name that person in your will. Otherwise, the court will determine who the guardian will be. 


What if You Become Incapacitated?


In Texas, your spouse will generally have authority to act on your behalf if you become incapacitated. What if something happens where both you and your spouse become incapacitated? If you have a Durable Power of Attorney and Medical Power of Attorney in place, you will be prepared for that circumstances. A Durable Power of Attorney will name a trusted person to handle financial affairs when either you or both of you are not able; likewise, a Medical Power of Attorney names a person who will make decisions regarding your health care when you no longer can.


Consult an Attorney


Although estate planning may seem to be complicated with additional considerations for blended families, an estate planning attorney can guide you through the process. An attorney knowledgeable and skilled in estate planning can prove invaluable for understanding your options and developing or updating your estate plan to fit your particular unique situation. 

 

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