This is part 2 of an on-going blog series about why you need an estate plan. No estate plan is ever the same because no two families are the same or have the same wishes for the distribution of their assets.
In Part 1, we discussed how state law will dictate where your assets go if you fail to execute a valid estate plan. This blog will focus on what happens if you have a blended family, a second marriage, or children who are not born outside of marriage
Roughly forty percent of families with children are “blended” families. Spouses have had prior relationships and bring children to the new marriage. What was novel in the 1970’s era of the “Brady Bunch” is now very common.
If you are part of a blended marriage, it is especially important to have good estate planning documents in place. You may consider your stepchildren as part of your family and want them to inherit a share of your assets. As long as you make your stepchildren beneficiaries in your will or trust they will inherit the share you specify. This is the same for step-grandchildren. However, if you have no will or trust in place when you die, state law does not consider stepchildren your natural heirs and they will receive nothing from your estate, even if they’ve been in your life for decades!.
A will or trust is also crucial if there are assets like farmland inherited from your family that you do not wish to pass to your spouse or stepchildren. If you have assets you wish to keep in your biological family, or to pass on certain members of your biological family, be sure to have estate planning documents in place stating this specifically. Without a valid plan, if your spouse outlives you, they could inherit this land and ten sell it or leave it to their own children instead of it staying in your family lineage.
Powers of attorney are also important in this situation. Blended families often consist of many members, with stepchildren, multiple sets of grandparents, and others involved. Each spouse in a blended family needs to think carefully about who will take care of their financial and health care decisions if they are unable to – especially if their spouse also becomes incapacitated. Sometimes each spouse in a blended family prefers that their biological child take over health care decisions if their spouse cannot. In other cases, you may have a stepchild in a medical field you would prefer to make those decisions. Powers of attorney will make your choices clear and put them into effect.
Every blended family is different. In some cases, partners can be uncomfortable discussing who will make decisions for them when they are incapacitated, and who they want to receive assets when they are gone. Even if the topic is challenging, it is best to make your wishes clear with estate planning documents. That way, conflict and confusion will be avoided when a crisis or unexpected death occurs.
Give us a call and we can discuss what options are best for you estate plan today!