If you’re part of a blended family, then you need to take care as you navigate your estate plan. A lack of diligence and thoroughness here could leave your estate in the hands of individuals whom you never intended to inherit, which means that your loved ones could miss out on the financial support that you meant to provide to them.
The first step in protecting your estate and your loved ones is simply to create an estate plan. A lot of people make the mistake of assuming that their assets will be passed on to their spouses and their children if they die without an estate plan in place.
This may be true to a certain extent, the issue is that you lose control over the estate after that initial distribution, meaning that your children and your spouse will be free to do with their share of the inheritance as they wish.
So, what can you do to keep control over your estate?
Fortunately, there are estate planning strategies that you can utilize to protect your loved ones and your estate in accordance with your wishes. Let’s look at some of those options:
- Use a remainder trust: A remainder trust allows you to leave a portion of your estate to a named beneficiary with the remainder of those inherited assets being passed on to another named individual upon the first beneficiary’s death. This means that you can leave money to your spouse with whatever is left over of that amount being left to your children from another relationship or your grandchildren. This helps ensure that your estate doesn’t just pass down your spouse’s familial line.
- Gift money during your lifetime: The IRS allows you to make sizeable gifts to individuals each year without suffering any tax consequences. This is one way to ensure that you can control how your assets are given away and you can see how your loved ones use them, which can ultimately be rewarding.
- Use pay-on-death accounts: With these accounts, you specify who will inherit the assets directly upon your death without any need for probate. This can help clarify the succession process and ensure that your loved ones have the support that you intend for them.
- Don’t overlook your grandchildren: If you’re worried about how your blended family status may affect your grandchildren, then you might want to just address your grandchildren directly in your estate plan. This may mean creating trusts for them or specifying in your will that certain assets will pass directly to them.
- Update you will regularly: Life changes and so do relationships. If you want to make sure that your estate plan is still suiting your needs over time, then you should revisit it regularly to make modifications as needed. Deaths, births, marriages, divorces, and changed relationship statuses can all warrant another look at your estate plan.
Find peace of mind with sound legal assistance
If you’re like most people, then estate planning may not be a top priority for you. But it should be. After all, a mishandled estate plan can have serious financial ramifications for your estate and your loved ones. With so much on the line, it might be best for you to discuss your circumstances with an experienced estate planning attorney who can help you navigate the process and ensure that you’re using the estate planning vehicles that are best for you and your family.