There are milestone events in people’s lives such as divorce, remarriage and starting a new family that can throw even the best-laid estate plans into disarray. Of course, many avoid estate planning altogether. A recent survey found that two out of three Americans do not have crucial estate planning documents.
When it comes to blended families, though, estate planning becomes even more complicated as beneficiary designations may cross state lines, and can include people who are not blood-related. Financial planning can also get caught up with emotional issues where there are competing interests between children, stepchildren and a new spouse.
Issues that can arise
When an ex-spouse starts a new family after divorce, the emotional ties and the role of that individual in the first family often do not change. But their responsibilities in the new marriage can complicate these ties, especially when the individual wishes to provide for everyone as part of their estate planning.
If estate planning is not done right, or if important documents are not updated with each life change, there is a risk that some children could be disinherited, assets might be claimed by a former spouse, and challenges to property division could crop up during probate.
Avoiding conflict while providing for everyone
There are important ways of creating separation in the financial matters concerning blended families that will avoid these conflicts. Keeping up to date with estate planning documents, as well as reviewing the estate’s current financial state and future bequests, is vitally important as an individual enters into new life circumstances.
Keeping key family members informed of your intent creates a consistency of information that will temper expectations. Deciding with former and current spouses what is fair to the children and stepchildren keeps everyone in the process and will minimize future disputes.
One useful estate planning tool to keep the financial matters of blended families separate is to set up a revocable trust for the benefit of a surviving spouse after the first spouse passes away. And as the primary trustee is usually the surviving spouse, choosing a backup trustee may be critical in preventing that spouse from draining the trust, possibly disinheriting the children in the process.
For Tennessee residents in Warren County needing to update their estate planning documents or who are dealing with unique situations that may come up in probate, it is important to have a trusted legal source to help you work through these complex matters and protect the interests of the estate.