Adults should have an estate plan in place to ensure their wishes are known and legally enforceable. Creating this plan is straightforward for many adults; however, that’s not necessarily the case for those who have a blended family.
One of the challenges that comes with blended families is ensuring that a person’s current spouse, as well as their children from a prior relationship, are cared for. Standard estate planning assumptions likely won’t apply to these families.
Clear instructions matter
Leaving assets directly to a child may create financial issues for the surviving spouse, and any ambiguity can cause disputes. Family members may all have different expectations about various assets, such as the home, heirlooms and bank accounts. Having a plan that includes a will and beneficiary designations creates clear instructions about what goes to whom.
Trusts can also be used to balance everyone’s needs. These have more flexibility than a standard will. For example, it may be able to set the trust to provide benefits to the surviving spouse while preserving the remaining assets for the children. Careful wording is critical to ensure that everyone understands the limits and responsibilities.
Discuss the plan beforehand
It’s a good idea to discuss the basics of the estate plan with loved ones so they can have their questions answered. This might help to prevent disputes when the estate plan has to be used.
Getting the estate plan together as early as possible is critical so everyone knows what to do. Working with someone who can assist with getting the plan set in a legally enforceable manner may be beneficial.