Blended Families
Estate planning for blended families can add a layer of protection for both a new spouse and one's children from a previous relationship. It is easy for assets to become mixed in blended families and many couples skip prenup agreements.
Three steps often taken when estate planning with blended families involve:
First, remove ex-spouses from all titled assets where he or she may be listed as a joint owner or a beneficiary (many people forget to do this step with unfortunate consequences).
Second, protect your own children. Separate assets can held aside for your children, rather than being distributed to an ex-spouse or current spouse.
Third, provide for your new spouse. A trust can provide an income stream and/or use of assets in your trust for the new spouse for a specific period of time or for the duration of his or her lifetime before ultimately being distributed to your children.
Life insurance is an easy way to provide an exact amount of cash to children or a spouse as the beneficiaries of a life insurance policy will supercede a will or trust.
Choosing successor trustees is important. Everyone hears stories about siblings turning on each other over inheritances.
How will it be between step-children?
Talk with an attorney about different options, such as naming co-successor trustees with one child from each side of the family.