Are you part of a blended family? A blended family can refer to a variety of different combinations. It can refer to extended family members who all live in the same home. More commonly, perhaps, a blended family refers to a family were one or both of the spouses have children from previous relationships. A blended family can make for a full house and a full heart. It can also mean unique considerations to account for during the estate planning process.
Estate Planning Considerations for Blended Families
In the most basic sense, estate planning for blended families is no different than planning in other family structures. There are often, however, more people to take into account when drafting plans. There are also often unique repercussions for those in blended families who do not establish an estate plan.
You see, stepchildren do not inherently have an inheritance rights to your estate. If you were to pass away without an estate plan in place, they would not inherit anything. Your surviving spouse or children would inherit everything. This may be okay with you and that’s fine. If, however, you wanted your stepchildren to be beneficiaries in your estate, you would need to formally adopt them or explicitly provide for them as beneficiaries of your estate. You could list them as a beneficiary of a trust, in your will, or as a beneficiary of something like a retirement account, like a 401k.
Without putting an estate plan in place to guard against this from happening, there is also a real possibility in a blended family that your own children may not end up inheriting anything from you. You see, if you were to pass away before your spouse without an estate plan, your estate would pass to them. If they had not formally adopted your children or explicitly provided for them in their own estate plans, then everything would pass to their children or family. This would essentially mean that your children would be cut off from your estate. You can prevent this situation from occurring in a number of ways.
A popular choice for avoiding this situation is by putting a marital bypass trust in place. When properly established, assets from your estate are transferred into the trust. Your spouse will have limited privileges and rights to the trust assets, but they will benefit from the income generated by the trust and, sometimes, the trust principle. Upon your spouse’s passing, the remainder of the trust would pass to your children or any beneficiaries that you chose to designate.
Minnesota Estate Planning Attorney
If you are in a blended family, it is important that you take control of your goals for the future. Let the team at Unique Estate Law create a comprehensive estate plan that takes into account everything that makes your family unique. We will help develop an estate plan that best reflects your goals for your loved ones and their future. Contact us today.