According to statistics from the Pew Research Center, a staggering 42 percent of Americans are in a “step” relationship. Which means that you or someone you know is probably one of the 95.5 million people who are part of a blended family.
Estate planning that is needed to secure a financial future for the millions of Americans who are divorced, remarried and widowed is available, but it can be tricky. There are numerous ways in which your plan can go wrong. The stakes get even higher if you want your estate left to your current spouse and family versus your former spouse.
The problem? Spouses and families, current and former, aren’t always able to come to an amicable agreement on vital issues.
Let’s take a look at some of the vital questions that may loom in a blended family estate plan:
- How would you like your assets handled when you die?
- Who do you want to make decisions for you if you were unable to make them for yourself?
- How will you balance the needs of children from the first spouse with the needs of the second spouse?
- Would you like your surviving family to have a significant amount of decision-making power over your estate?
You might want to establish a trust to lay everything out in detail.
With a better idea of what you want to happen in the case of your untimely demise, you should discuss your plans with a qualified estate planning attorney, who can formalize them and add legal structure. Leaving open-ended questions may provoke “slighted” family members to sue causing delays, dissention, and legal fees.
“An ounce of prevention is worth a pound of cure.” Ben Franklin
Using legal documents (Living Will, Trusts, and Power of Attorneys), we can ensure that everyone receives the inheritance that you want.
Contact estate planning attorney Chuck Bendig to get started.
If you’ve thought about estate planning and have contemplated when and how to distribute your assets to your heirs, read on. You probably imagine that this process will entail a series of trade-offs to prevent emotion-laden family problems. However, when you focus on numbers, you’re dealing with objective and straightforward facts.
But, you are in murkier waters when considering who should inherit your wealth, and you understand that emotions will most likely factor into those decisions. The truth is, there is no correct answer to how to distribute your estate. But here are some questions that will help frame your thinking:
- How much would you like to leave to charity and how much to your family?
- Will you divide your assets equally among your heirs, or on some other basis, like need or good behavior?
- What form does your estate take? Is it cash, securities or some other assets? Do you want to give these outright or leave them in a trust?
- Can the heirs you chose to handle the responsibility of managing their own finances, or will they need help?
- If you use a trust, will there be provisions, what will they be and whom will you designate as the trustee?
Maybe we should take a step back and clarify what exactly an heir is. An heir is a relation who potentially is entitled to money or property after you die, such as a spouse or child. Laws in each state outline the exact order in which heirs inherit property, but the list stops at a certain point. Not every heir automatically inherits.
The term “heir” is often used when someone dies without a will. When that happens, the estate administrator tries to find who rightfully inherits the property.
A “beneficiary” is a person or an organization who receives money or property by being specifically named in your will or trust. Beneficiaries can include charities, descendants or close friends, even places of worship.
If you leave a will, beneficiaries often have more rights to whatever assets remain after probate. If you don’t leave a will, the assets go to the first heir in line, and the process continues until a living blood relative is found. Keep in mind that rules may vary depending on the jurisdiction.
Trusts can help ensure the people you want to get your assets, in the form you want. Ensuring the transfer of your hard-earned assets to your heirs is a crucial part of a well-thought-out estate plan. Although it may be uncomfortable to have a conversation like this with your spouse, your children, and other possible heirs, it will enable them to ask questions and to clarify what your exact wishes are. While the estate planning talk deals with sensitive issues, it will mean a smoother transition for your heirs after your death.
Get started with your estate plan.