As we’ve discussed previously on this blog, foregoing estate planning is a dangerous endeavor. After all, New York’s intestate succession laws probably don’t mirror how you want your assets to be distributed, which means that your estate could fall into the wrong hands, if not immediately, then later down the road. This can be especially true if you’re in a blended family.
Asset distribution in a blended family
Most people who are in a blended family think that they can skip complex estate planning, or forego planning altogether, because they simply want their spouse to inherit everything. Even if that’s the case, though, bypassing estate planning could leave your biological children at risk of not receiving the amount of your estate that you’d hope. This is because your spouse will obtain at least $50,000 in assets plus half of everything else. If he or she chooses to leave those assets to his or her biological children, then your children lose out on those assets altogether.
Fortunately, there are ways to protect your biological children’s interests in your estate. One of the best ways is to utilize a remainder trust. Here, you leave assets to your spouse with clear instructions that he or she will only receive periodic disbursements of trust funds. Then, once your spouse passes away, whatever is left in the trust, known as the remainder, is distributed to another named beneficiary. That could include your biological children.
Noneconomic estate planning matters
It’s important to recognize that estate planning is about more than just figuring out who is going to inherit your assets. You should also consider issues such as guardianship, powers of attorney, and healthcare directives. Each of these legal issues can have significant implications for your future and the future of your estate.
For example, if you end up becoming incapacitated to the point that you can’t make financial decisions, then you want to make sure that you have someone lined up to make those decisions for you. That person should understand your wishes and share your values. If you don’t have anyone in place to assist in that regard, or you choose the wrong person, then your loved ones could miss out on the financial support that you intended to provide for them.
Talk to your families
To make sure that expectations are clear and you know what you want out of your estate plan, consider being transparent with your families. We know these can be difficult conversations to have, but they can explain your motivations and prevent familial tension later down the road. After all, if your asset distribution plan comes as a shock to some of your famiy members after your passing, then there’s a greater likelihood that your estate planning documents will be challenged and familial relationships will fray.
Obtain the assistance you need to create a holistic estate plan
A lot of people who procrastinate in estate planning do so because they simply don’t recognize its importance or they don’t know what their options are for matters like asset distribution. That’s why we’re here to help. We diligently work with our clients to make sure that they understand the law and how it applies to their circumstances, and we discuss with them the best ways to meet their goals for the future. If you’re interested in learning more about what we can do for our clients, then please continue to browse our website.