Second marriages and blended families pose some issues to Estate planning and one should have become much wiser after losing a first marriage. All in all, you are with your new spouse, probably also with some kids from the first marriage and those from the new spouse, all in a new home. How do you start all over again creating an estate plan based on your unique family situation that would ease your mind about your new home and help you pursue happiness once again?
When it comes to family goals and things of the heart, good communication always comes first. Be open to your new spouse and let them know about all assets which you currently own and how you would want them distributed at your death. You should also involve your children in the discussion if they are old enough to take it. As difficult and emotionally-charged as such discussions can be, they go a long way in bringing lasting peace of mind to you and your new family.
You may also want to consult an estate planning lawyer before making such discussions. Estate planning lawyers are known for their compassionate and insightful services, offering advise in financial matters in different families, each with their own unique estate planning issues.
One major problem with second marriages is that either partner’s children may eventually not get their due share of the estate when that partner dies, as supposed under traditional estate planning. When both partners have a share of the estate and each have their own beneficiaries, when one partner die, the surviving partner may easily alter the estate plan and remove the deceased partner’s beneficiaries. Bad, right? But it could very well happen if you do not plan ahead for such contingencies. The following are ways to avoid such problems from occurring in the future.
Establish a Trust
Living Will
A living will, also known as an advanced health care directive, is an estate planning document in which you appoint a person that would make medical decisions on your behalf when you become a victim of a medical emergency. With the document, you state clearly the type of health care you want during your last days.
Establish a durable Power of Attorney
Should you run into a sudden accident or a terminal illness causing incapacitation, a durable Power of Attorney document appoints a person to take charge of your financial and legal affairs on your behalf since you will no longer be able to attend to them yourself. If you had chosen your divorced spouse as your representative, ensure you revoke it and create a new one in which you appoint a trusted individual (could be your spouse or an adult child).
Beneficiary forms
Many people forget to change the beneficiaries designated in their life insurance policies and IRAs when they get divorced, and it is important you do so as they eventually must go to your designated beneficiary in the form regardless of what your will or trust says. You may also consider leaving some assets — such as proceeds from an insurance policy — and then leave the rest to your children.
While designating your children as beneficiaries in any of these forms, never you name minors because those assets would never be bequeathed to them until they turn 18. The court would have to step in to appoint a guardian that would look after the asset for them until they attain that age. If you indeed have minors whom you want to benefit from your IRAs and insurance policies, then you should speak with a competent estate planning lawyer to access your options on how to avoid court intervention.
Know more about each other
As you get married, remember that each spouse is coming with his or her own past, assets, friends and families. A spouse may come with an old 401(k) plan or a small insurance policy which may have been seen to be insignificant and thus forgotten. Both of you have to open up about these assets, no matter how small they may seem, to avoid giving your grieving spouse financial and legal issues when you pass away.
Also, let your spouse know about your old friends, families and relatives who they may have to call on when something bad happens to you. Both of you should have contact information of the other spouse’s relatives and friends.
Estate planning lawyers
Every family presents its own challenges when it comes to estate planning and what works for one may not work for another. However, discussing with a highly experienced estate planning lawyer is actually the best choice you can make in finding the best individualized solution for your situation. Contact one today.