Collaborating With Estate Planning Attorneys for Blended Family Challenges

Collaborating With Estate Planning Attorneys for Blended Family Challenges

The Pew Research Center defines a blended family as “a household with a stepparent, step-sibling, or half-sibling.” When couples marry for the second or subsequent time, if neither has children from a prior marriage or relationship, they do not form a blended family.

When a blended family is created, the spouses must carefully review their estate plan to be sure that every family member is considered. There will generally be several portions of the plan that need updating or clarifying. The AARP strongly recommends that you consult an estate planning attorney who will guide you through the challenging and possibly complicated process of updating your plan to accommodate your wishes for your entire blended family.

Step One: Take a Detailed Inventory of All Your Individual Assets

After you and your spouse (or prospective spouse if taking this step prior to your marriage) each inventory your individual assets, including insurance policies and retirement plans, you need to share this information with each other. You then need to discuss how you want these assets distributed when you die, considering your wishes for each family member.

Step Two: Change Beneficiaries (If Needed)

Your ex-spouse may still be the named beneficiary of your retirement plans and insurance policies. Too many spouses have been shocked to learn after their spouse has died, that the ex-spouse, not the current spouse, is still the beneficiary of these types of assets, which go directly to the named beneficiary upon the death of the covered spouse. They do not go through probate.

Also, review all your bank accounts. An ordinary checking account generally has a beneficiary who has immediate access to the funds when the account owner dies. How you hold ownership in real estate may also be affected and need to be changed if you are still a joint owner with your ex-spouse.

Changes will need to comply with the terms of your divorce agreement, so be sure to take your final divorce decree with you when you consult with your attorney. For example, a divorce order may require a spouse to name an ex-spouse as a beneficiary on a retirement plan or insurance policy, at least for a period of time after the divorce is final.

Step Three: Consider Guardians for Minor Children

You each may have children from a prior marriage or relationship. In addition, you may also have a child or children with your new spouse. Your ex-spouses with whom you share children will need to be part of your individual decisions of naming guardians for your minor children if you die. Considerations of bonds formed with half or stepsiblings must also be considered.

Step Four: Change Your Powers-of-Attorney.

You will not want your ex-spouse to have the power to make financial or healthcare decisions on your behalf when you cannot make those decisions on your own. Make sure these documents reflect your current wishes.

Update your will and consider forming trusts to make your estate plan the best for all members of your blended family.

You will need to update your will to be sure it adequately expresses your wishes, whether to leave or not leave assets to children or stepchildren. If you do not want a child or stepchild to inherit, your estate planning attorney will be sure you have the correct phrasing so the probate court will know this is your intent and you didn’t just forget to include that person in your will.

About the Author: Bill K. Pasko

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