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Blended Families and Estate Planning

by | Nov 14, 2020 | estate planning

blended family estate plan

Many Americans are part of a blended family. A blended family is a family unit in which one or both parents have a child or children from a previous relationship—and have combined these families into one new family. With blended families, there are some additional considerations to keep in mind throughout the estate planning process.

California Estate Planning Attorneys

The estate planning attorneys at Galanti and Copenhaver can assist you with any of your estate planning needs, including special considerations for blended families. Contact our office today to schedule a consultation to meet with one of our attorneys and get started planning for the future of your family.

Where to Begin When it Comes to Estate Planning for Blended Families

The first step with any type of estate plan is to decide which individuals you want to include. Depending on the specifics of your estate plans, you may need to choose someone to serve as the trustee of a trust, the executor of a will, or someone to take on power of attorney in the event that you become incapacitated and cannot make health or financial decisions on your own.

In addition to choosing the people whom you would like to take on these roles, you will also need to think about who you want to include in your estate plans as beneficiaries. The beneficiaries of your estate can be direct heirs, other family members, friends, or even charitable organizations. These beneficiaries will receive distributions of money and property from your estate upon your death, according to the terms set forth in your estate plans.

Allocating Assets and Property to Beneficiaries

Some of the biggest decisions you will face throughout the course of estate planning involve how much or how little you want each beneficiary to receive from your estate. It is a good idea to at least have a general idea of what you want to leave each beneficiary before you meet with an attorney to make your estate plans.

For blended families, more specifically, it is important to keep in mind the financial needs of your chosen beneficiaries, especially for surviving spouses, young children, and other dependents. You may also need to consider the terms of any prenuptial, post-nuptial, and divorce agreements.

Common Techniques for Blended Family Estate Plans

Of course, estate planning is full of personal choices, and ultimately, it is up to you as the grantor of the estate to determine who receives what from the estate. However, there are some common techniques that estate planners can use to achieve a balance of fairness for the beneficiaries of their estate.

  1. Family Trust

One method of estate planning that can be useful for blended families is to create a family trust. A family trust holds money in the trust for your surviving spouse and any named children. This trust essentially creates a co-mingled pool of assets. While useful for children to benefit from assets while the surviving spouse is still alive, there are also some complications that can arise due to asset use prioritization.

  1. Marital Trust

 Marital trusts are often recommended to be used in estate plans with blended families. A marital trust allows for assets to be made available to the surviving spouse. It also dictates how any residual funds remaining in the trust are to be distributed upon the death of the surviving spouse. This approach allows the first decedent to make sure that the remaining funds flow down to their children—or that the funds are split between children and stepchildren, which is often an important consideration for blended families.

  1. Outright Ownership

Another common approach to estate planning for blended families involves an outright transfer of ownership to the surviving spouse. This is usually simple enough since no trusts are involved. However, the ultimate distribution of assets will then be subject to the estate planning decisions made by the surviving spouse. While it is a simple way to handle this matter, the trade-off is that you do not have control over what happens to the assets down the road, and there may be negative implications for your children and other heirs.

  1. Immediate Bequests to Children

In blended families, there is often a delicate balance of ensuring that your spouse is supported after your passing without slighting your children. One way to make sure that your children receive support is to acknowledge their importance by making an immediate bequest to your children at the time of your death. You can make an immediate bequest outright, or you can also choose to have it held in a trust depending upon what makes the most sense for your family.

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