Many people believe that “estate planning” is only for the super wealthy among us, but the reality is that everyone wants their wishes to be followed, regardless of their economic status. For example, parents in blended families have a unique interest in ensuring that children from prior marriages are treated fairly, even if their parent dies first. It is important to remember a few basics about estate planning:
1. Beneficiary designations trump estate planning documents (i.e. wills, trusts, etc.). So, if you draft a will that says everything should divide equally between your spouse and your children, but you only name your spouse as the beneficiary of a particular asset, only your spouse will receive that asset upon death.
2. Wills are documents that communicate to a probate court, which can be a long, expensive process, and offers disgruntled family members a place to argue. This is never ideal, but can be particularly undesirable for blended families if there are disagreements between prior children and new spouses.
So what do we recommend? Having a plan is essential! Make a list of assets, including how they are titled, and who is named as your beneficiaries, and then discuss it with one another! Talk about whether you want to see children inherit right away upon their parent’s death, or if you are more concerned about preserving assets for the benefit of the surviving spouse. Communicate any concerns about family dynamics, and decide who should be in charge of making sure that your wishes are followed. These discussions, and the resulting estate plan, will go a long way in encouraging lasting peace among family members.
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