Second marriages bring years of experience to a new relationship. Along with this, there are often children that become siblings in a new blended home. How can you ensure your estate plan covers them all fairly?
Keeping the blended family in mind may force you to take a different approach when creating an estate plan. Take a look at some of the pitfalls you should avoid and tools you should consider when planning for your blended family.
Draft a will
The will becomes the foundation for estate plans. During probate, your will travels through the court to ensure that property and cash go to those you name. When one spouse dies, the other typically inherits all joint accounts and property. The disposition of those accounts does not occur until the other spouse dies. Keep in mind that there is no guarantee the surviving spouse does not change the will to alter who inherits.
One way to avoid a problem with how biological children receive money is by naming beneficiaries of various accounts. These include things such as retirement accounts and insurance policies. If you want to ensure your biological children inherit should you die first, naming them as beneficiaries mean they automatically inherit those accounts without probate.
A trust is a depository within which you can place cash and property. These items then become the property of the trustee, who you name. You may place restrictions on the trust, such as withholding payouts until a trustee reaches a specific age. A trust, much like an insurance policy, passes directly to the trustee when you die.
While a will is a traditional document for handling your affairs after death, you may want to consider that your family situation calls for other avenues.