Some blended families get along well. However, some families don’t. If a parent becomes incapacitated or dies, there’s usually conflict among the surviving family members. To counteract this, make sure that you create an estate plan that takes into account the following considerations.
Life Insurance and Retirement Accounts
You could consider leaving a majority of your assets to your spouse and ensure that your kids would get what’s rightfully theirs from a life insurance policy or retirement accounts as your beneficiaries. Retirement accounts such as 401ks and IRAs as well as life insurance doesn’t pass down through wills but go directly to the beneficiaries, even if a will indicates otherwise, explains a prominent estate planning lawyer in Utah.
If you have recently divorced, make certain to update your primary beneficiaries so that your ex-spouse won’t get a hold of your life insurance or retirement account.
Spouses often leave everything to each other if one partner dies. The problem with this setup is that your surviving spouse might decide not to give anything to your kids from a previous marriage. To address this potential issue, you could put all or a portion of your property and money in a trust that could only be used by your spouse while he or she is alive. Once your spouse dies, everything will go to your kids. You can choose a neutral trustee to oversee your trust once you pass away.
Power of Attorney and Living Wills
You must have a legal document called a Living Will. This document states all your wishes should you become incapacitated or terminally ill. It also includes a power of attorney that appoints someone to manage your finances should you become unfit to do so, and appointing an individual to make all your medical decisions for you when you’re no longer capable of doing so.
If you fail to create an estate plan, all your property and money that would typically be passed down through a will would be distributed according to the intestacy laws of your state in the event of your death. This means that you won’t get to have a say on how your property will be divided.
You need to plan your estate plan well so that you could properly provide for the blended family you’ll be leaving behind upon your death, and minimize potential stress and conflict.