Four Estate Planning Tips for Blended Families
1. Discuss Your Assets and Estate Goals Before Your Marriage
Before you marry your new spouse, consider having a discussion about your assets and estate planning goals. It may make sense to have a prenuptial/antenuptial agreement to make sure your estate planning wishes are carried out. If you do not have a prenuptial agreement when you die, your new spouse may have certain unexpected rights in your estate, even before your own children or loved ones. You will likely want to create an updated Will, because, without a Will, Minnesota intestate laws dictate who receives your property. Your children from a previous marriage may not receive the amounts or items you desire under intestate laws.
Having a Will generally will ensure that your property is distributed according to your wishes. Also, if your children are minors and their other parent is not fit or deceased, you need a Will to ensure that you choose the person you desire to raise your children should you pass away.
2. Life Insurance and Retirement Accounts
These accounts pass directly to beneficiaries instead of going through your estate. Therefore, you may want to purchase additional life insurance policies to protect your new spouse, children, stepchildren, and any other loved ones you want to benefit.
You may also want to discuss who should be the beneficiary of accounts that you want to benefit your minor children. You do not necessarily need to choose your new spouse as the beneficiary. A trust may be more appropriate for those assets as long as your children are minors.
3. Trust Agreements for Blended Families
Trust agreements are great tools for estate planning in many situations. However, they can be exceptional tools for estate planning with blended families.
You have much more flexibility when using trust agreements as part of your estate plan. For example, you may set up a Supplemental Needs Trust to provide for a child with a disability or impairment. You may also set up a trust for life insurance proceeds or education expenses for a child.
Trust agreements allow you to have more control over your property and how that property is used. Be sure to consult with an estate planning lawyer before executing a trust to ensure that the type of trust meets your needs.
4. Powers of Attorney and Health Care Directives
Depending on your situation, you may want to name a person or persons to act on your behalf if you cannot make decisions. You may give another person the authority to make financial decisions and health care decisions for you. With the required language, these individuals can continue to act on your behalf even though you might be incapacitated.
Without these documents, your new spouse and/or loved ones would generally have to go to Court to obtain the authority to make these decisions. Individuals who remarry and have adult children may want to give that power to their children instead of their new spouse. If so, they must have these documents drafted and executed before they become incapacitated.
Contact Our Minnesota Estate Planning Attorney for Help
One of the best tips for estate planning for blended families is to contact an experienced Minnesota estate planning attorney.
An estate planning lawyer can help you identify specific issues and needs you want to address in your estate plan. Your lawyer can suggest various estate planning tools and develop a plan that gives you peace of mind that your wishes will be carried out and your loved ones will be cared for after your death. Get in touch with our office today.