Divorced, remarried or widowed? Your estate plan needs extra attention.
Chances are, you or someone you know is part of a blended family. Once uncommon, fully 42 percent of adults now have some kind of step-relationship, according to Pew Research. That’s 95.5 million people.
For the millions of divorced, widowed, and remarried Americans out there, estate planning is extra tricky. In a blended family situation, there are more opportunities to get it wrong, and the stakes—ensuring your assets are distributed to a current spouse and not an ex, or that your children and stepchildren are treated according to your wishes—are often higher.
Additionally, spouses—current, former or both—may not see eye-to-eye on key decisions. Who takes care of the kids if one parent dies—the surviving spouse or the natural parent? Which assets belong to which spouse?
Working through these details can not only avoid future estate planning hassles but also help maintain healthy relationships between all parties involved.
To get started, work through these questions:
- What do you want to happen when you die?
- Who do you want to make decisions for you, if you can’t make them for yourself?
- Who will provide for your kids?
- Who will take over as guardian for any minors when you die—the surviving spouse or the natural parent? Do the kids get a say?
- What are you going to do for your surviving spouse?
- How do you want to provide for them?
- Do you want to give them broad decision-making authority or would you rather limit it?
- Do you and your present and/or former spouse have shared objectives?
- Will you need two separate attorneys to handle your plans?
- How open are you willing to be in the planning conversation with a past and/or present spouse and an attorney?
- Do you live in a separate or community property state? (In a community property state, both spouses are typically considered equal owners of all marital property. In a separate property state, if your name appears on an asset—say a home mortgage—you are considered the owner, though your spouse has the right to claim a fair and equitable portion of those assets.)
When you sit down to think about these matters, keep in mind any wealth or age disparities between yourself and any future or former spouses. If remarrying, do you need a prenuptial agreement? If there’s a big age difference, who’s more likely to die first?
Once you’ve decided what you’d like to see happen, it’s important to work with a lawyer to formalize and structure your plans. Free online services are not sophisticated enough to deal with the complexities of blended family estate planning, Additionally, it’s important to work with a lawyer who specializes in estate planning and has worked with blended families before.
A good, foundational estate plan can be costly, but it’s a bargain when you consider the benefits. Planning not only gives you peace of mind about what will happen to your assets when you’re gone but also allows you to preserve the peace with loved ones now.
Last posted by Matthew T. McClintock, J.D. at estateplanning.com