Legal Blog

The Weekly Scenario: Estate Plan in a Blended Family

Question: How might my divorce and remarriage affect my estate plan in a blended family?

 

Answer: It is important for individuals who remarry to carefully revisit their estate planning documents to make sure the planning is consistent with the new ‘blended’ family.

There are a whole host of things to consider:

1.    Many divorce settlements include provisions that may impact retirement accounts, life insurance and other assets.  Some of these documents are beneficiary controlled which means they should be able to be changed.  Moreover Wills, Trusts, Powers of Attorney and Medical Directives should be revised to reflect the individuals you wish to make decisions that affect your estate plan.

2.    With blended families, there tends to be more complexities.  If there are children from a prior marriage, it may be best to create a trust for the spouse that has restrictions for distributions of the income and principal, but also a potential end date of the trust.

3.    Along the same lines, in a blended family, it is important that all assets be categorized in terms of what is separate property or joint/commingled.   Titling of assets and accounts is critical as in many cases, titling will control the distribution of property over what the Will provides.

4.    In a blended family where conflict may exist, sometimes the smallest things will set off a firestorm.  Such items as a piece of jewelry or Dad’s coin collection should all be addressed to ensure a smooth transition of the property.  Establishing a trust allows you to specifically allocate assets in particular ways so that multiple family members are taken care of in multiple ways.

Comment: It’s important to be clear about your intentions and address as many  concerns as you can so your assets are distributed the way you want them to be and the individuals you want to be in charge of your affairs are specifically named.
 

 

As always, if you have any questions or would like to learn more, please contact me at sshane@offitkurman.com or 301-575-0313.

ABOUT STEVE SHANE

Steve Shane Casual SmallSteve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates.

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