Most families are wondering what blended families should know about estate planning and things that they should consider. In addition to the usual items like a will and trusts, you should consider a prenuptial agreement and beneficiary designations.
Joint Ownership With Right Of Survivorship
When you are planning your estate, you should take into consideration the types of property you own. This is especially important if you are in a blended family. If one of the owners has a higher estate, you will want to make sure that you do not disinherit the other partner. Joint ownership with the right of survivorship (JTWROS) allows a surviving spouse to own and manage the property after the other spouse’s death. Property held this way does not go through probate. There are many advantages to owning property this way. However, there are also risks. The biggest risk is accidental disinheritance. To avoid this risk, you will need to plan your estate correctly. That means drafting a will, establishing a trust, and determining the distribution of assets. You can also use entity structures to protect your business.
There are a number of different types of joint tenancy. These include tenants by the entirety and tenancy in common.
Prenuptial Agreement
A prenuptial agreement can help you preserve your assets and prevent future problems. It can also bring you closer together. However, before entrusting your estate plan to an attorney, ensure you and your partner clearly understand the advantages and disadvantages. A prenuptial agreement is a legal contract you and your partner sign before marrying. The agreement will detail what will happen to your assets and debts in the event of divorce. In addition to protecting your spouse, a prenuptial agreement can ensure that your children from prior relationships get the inheritance you want them to receive. While a prenuptial agreement can be a good way to protect your assets, it can also be a bad idea. For instance, a prenuptial agreement may be invalidated if both parties are represented by attorneys who need more conflict resolution experience. Even if you do not use a prenuptial agreement, you still need an estate plan. An experienced estate planning attorney can help you decide what is best for your family and your estate.
Trusts
Estate planning for blended families may be more complicated than for other types of families. Because of the many different people in a blended family, it is important to ensure that everyone is properly taken care of.
Before estate planning for a blended family, a few things to consider include the different issues that can arise after death. One of the main issues is the distribution of assets. For example, your children may want to receive money outright on your death, while your spouse may want to access funds while you are alive. Another issue is whether or not to include stepchildren. Stepchildren typically do not inherit unless they are legally adopted. However, if you have previously had children from a previous marriage, you can include them in your estate plan. You may also want to include a personal property memorandum when writing a will. This document lists specific personal items and names who will receive each item.
Beneficiary Designations
Beneficiary designations are a key component in estate planning. They help ensure that your spouse receives the care they need when you pass. However, you should update your beneficiary designations whenever there are changes in your family. The number of blended families is rising. It includes married couples with children from previous marriages or romantic partnerships. This can lead to confusion about how to care for your assets when you die. Luckily, there are many options for creating an estate plan. A revocable living trust can be an excellent tool for blended families. In addition to allowing you to control your assets while you are alive, it can also prevent your assets from being exposed to your beneficiary creditors.
Bloodline Trusts
Many people entering a blended family fail to create an estate plan. This could be a mistake. You should work with a professional to devise an effective plan. The use of a trust can be crucial in your estate planning. A bloodline trust is a great example. It will help preserve assets for your kids and future descendants. A trust can also be used to protect your hard-earned money. For example, you might have a business interest or a unique collection of family heirlooms. In addition to preserving your inheritance for your children, a bloodline trust might also defer estate tax. There are many ways to accomplish these objectives. First, you can consider using a family limited liability company. This will shield your property from claims by your former spouse or a potential creditor. Another option is to place your assets in an irrevocable life insurance trust. With this type of trust, you can specify how much should be inherited by your stepchildren.
