If you’ve remarried and have children from a previous marriage, or if you’re remarrying a person who has children of their own, it’s important to consider the impact this may have on your estate plan. An ex-spouse receiving the entirety of an estate happens more often than you think. There are also numerous cases of children who don’t receive any assets upon the passing of a parent.
It’s estimated that at least half of couples in the U.S. are remarried or were divorced in the past. That’s a significant number of people, and too many of them are unlikely to think about their estate plans. Here are four estate planning considerations for blended families.
1. A simple will is likely not enough
The simplest of wills leaves everything to the other spouse. This might be a fine option for older couples who have no children. However, if either or both of you have children, understand that a simple will may very well leave your heirs without any assets. The surviving spouse has no obligation to pass any remaining assets onto your children or anyone else. They may choose to leave the entire estate to their children. You may wish to consider looking into more comprehensive estate planning options.
2. Think about setting up a trust
Many people have a misconception that trusts are only for the wealthy. Trusts can benefit people from all walks of life. You might wish to establish a trust that leaves your assets to your spouse for their lifetime. When your spouse passes on, the remainder of the trust can go to your children. This can help your spouse receive the benefits that come with a simple will, without the unintended consequences that can follow.
3. Think about who you want to make healthcare decisions
Even if you haven’t created any other type of estate planning document, you may have an advanced health care directive or power of attorney. Take some time to think about who you’ve entrusted to make decisions on your behalf. Tragic stories occur every day involving spouses who cut off information access to an incapacitated person’s children and vice versa. Do you trust the person who’s named to act not only in your best interest but also in the interests of those you love?
4. If you have an estate plan, revisit it
Maybe you were married for 30 years. During that time, you created an estate plan. After the divorce, you’ve fallen in love with another, but you never bother to update your estate plan. Your current partner may be in for quite the surprise when your ex receives all of the assets from your estate. You should always consider revisiting your estate plan every few years, even if you haven’t experienced any significant life changes. You may find some things, large or small, that you wish to update.