You are happy in your second marriage after a bitter divorce. You have children with your ex-spouse and with your current one. The blended family is truth in many homes in the USA today. Every parent wants to include all the children in the estate planning strategy. The trick is to make a plan that is fair to everybody.
This includes your present spouse, children from your first marriage and from your second marriage too. You might want to leave something behind for your other loved ones too. Each blended family is unique. The key to creating a great plan is communication. Once you are clear about what you want to do, it is time to connect with an estate planning lawyer.
Create A Trust While Estate Planning
A Will might take care of distributing your assets, but probate may be a long and expensive affair. If you have sizable assets, you may look into creating irrevocable trusts for the children. These trusts are as the name suggests, final in nature. If you are very sure of what you want to leave to which child, you can create a trust that places the property in their name via a trust. This will ensure that the asset passes directly to the child without any interference from both your current and ex-spouse.
You can also create living revocable trust with the rest of your assets. Here the trust owns the assets. After your death, your current spouse gets an income as per your directions from the trust. The property then passes to your children after the spouse’s demise or remarriage as you deem fit in your directives.
A living will is also called an advanced healthcare directive. It is a document that is of prime importance when planning your estate. It is a powerful tool to establish the right of one child or spouse to make a decision about your end of life medical care. This family member designated by you can take decisions about any extraordinary life-saving measures or care that is needed if you are unable to make the same.
The Living Will comes into play in your lifetime if you are mentally or physically unfit to make your wishes known. It can be in play to request an autopsy or organ donation. The Living will is not valid once you die.
Durable Power Of Attorney Is An Important Part Of Estate Planning
A durable power of attorney signifies the power you vest in a trusted family member to look after your finances and legal affairs in case you are incapacitated. This is a very sensitive matter as there are many beneficiaries in a blended family and your current spouse may or may not share the same warmth with all your children. Do ensure that the durable power of attorney is vested in the right person. Review your estate plan periodically and change the agent as needed. If your ex-spouse is still in charge it may be catastrophic if the power of attorney is unfortunately needed to be in play.
Beneficiary List In Estate Planning Needs To Be Updated
It is very common that people forget to change the beneficiaries in the IRA, life insurance policies and other investments. These instruments are out of the purview of probate. They will directly pass on to the nominee that is listed on them. This is a major flaw that most estate planning strategies that are not reviewed periodically face.
It is important that you do not name minors as your beneficiaries in these instruments. This will be impractical as the court will appoint a guardian who will be in charge of the asset until the minor attains adulthood. This can be counterproductive to your vision. When you remarry, it is best to establish healthy communication with your spouse about your estate planning. This will ensure that he/she will look after your wishes when you die.
There is a lesser chance for protracted legal battles. There will be no challenges to your will, and the process of inheritance will be smooth for your blended family. Both spouses need to have comprehensive knowledge about their other half’s wishes about their hard-earned money. This will make the probate and disbursal of assets a smoother affair.
It is best to take the opinion and help of a seasoned estate planning attorney from New York to work out the details for you. The professional approach will help you untangle tax and legal issues and make fair plans for the entire family.