Blended families have been the new norm in the United States for some time now. Family dynamics can be complicated and blended families face their own unique challenges when it comes to estate planning. Ensuring that everyone feels valued can be tricky, especially if you feel the need to protect assets from someone who may not have the best intentions. It is also important to understand the potential for some members of the family to become unintentionally disinherited down the road. An experienced estate lawyer can identify potential issues and roadblocks and help you create an estate plan that protects everyone’s interests.
Resolving Inheritance Questions For Blended Families
There are many different ways to be proactive so your children and other beneficiaries do not have to deal with inheritance problems after you are gone, including:
- A well-crafted will that takes possible future scenarios into account
- Pre- and post-nuptial agreements
- Changing beneficiary designations on life insurance policies and accounts
A family wills and trusts attorney can help you find options that meet your specific needs and family situation.
A Qualified Terminable Interest Property (QTIP) is an irrevocable trust that can be a useful estate planning tool. If you have had multiple marriages and want to make sure your assets go to your children from an earlier marriage after your current spouse’s death, A QTIP may be a good solution. By establishing a QTIP trust, you can provide for your surviving spouse for the rest of their life, but once they pass away, the funds in the QTIP are distributed to beneficiaries as specified by the grantor of the trust (you). The surviving spouse cannot make any changes to the trust or add additional beneficiaries, so a QTIP is a reliable way to ensure your assets are distributed to the beneficiaries you choose, even after your death.
An Irrevocable Life Insurance Trust (ILIT) is a trust that is specifically set up to own a life insurance policy. After your death, life insurance policy proceeds are placed in the trust and will go to the beneficiaries you specified when the trust was created. These proceeds do not have to go through probate and an ILIT can help to ensure the children you designate as beneficiaries are not disinherited.
When setting up any kind of trust for estate planning it is usually a good idea to choose a neutral party to be a trustee or fiduciary, especially in blended families. If you have a longstanding relationship with a contracts lawyer, accountant, or another professional you trust, naming them as trustee can help cut down on family conflict and stress.
Update all Critical Estate Planning Documents
Forgetting to update your will or beneficiaries on insurance policies when you get remarried can have disastrous consequences for your beneficiaries. Once you marry a new spouse, your previous will may become invalid according to the laws of intestacy in Pennsylvania. Beneficiaries on insurance policies must also be changed—in the event of your death they will be paid to whomever you last named as beneficiary, which may be your former spouse. If you are considering a new marriage, a prenuptial agreement can also be an effective way to specify what your spouse is entitled to and how you want your other assets to be distributed upon your death.
If you want to learn more about estate planning for your blended family, the team at Carosella & Associates can help.