Estate planning for blended families

January 26 2018


Second marriages and blended families have become increasingly common. Since estate planning can be more complex in these scenarios, it's important to prepare for a variety of situations through research, planning and by reaching out for help when needed.

Trust in Trusts
A trust requires resources to set up and maintain, but when it comes to outlining specific financial wishes that will be faithfully and legally followed, the expense is probably worth it. Many, like the qualified terminable interest property trust, are designed with a particular purpose in mind. This option provides for a surviving spouse but protects control over assets from any future spouses if they choose to remarry.

Multitrust strategies, like an AB Trust, take care of the surviving spouse, but ultimately go to a different final heir or heirs. Since they're legal vehicles, trusts can be highly customizable and often involve an investment plan to maintain long-term assets.

Aim for Fairness
Leaving equal inheritances to family members of different ages may not always be fair. For example: Maybe you've already paid the college costs of one heir but the other is still a few years away from starting school. To avoid imbalances, consider including a clause to indicate a stated age or life achievement that will trigger eligibility for your legacy assets.

Strategize Carefully
Think carefully when choosing who you want to serve as your financial decision-maker in the event you're unable to act independently. Naming a financially savvy loved one or even an objective third-party professional might be the best way to make sure your wishes are carried out correctly.

Think of estate planning as an act of love. Taking these steps now will remove future doubt and uncertainty and leave your blended family with better clarity when it comes to your financial intentions.

"Rule No. 1 : Never lose money. Rule No. 2 : Never forget Rule No. 1." Warren Buffett

"I try not to borrow, first you borrow then you beg." 
  Ernest Hemingway