Estate Planning for Blended Families

Blended families occur when people with children from previous relationships enter a relationship and start a new family unit. Sometimes this even includes children that result from the new relationship. Estate planning can be complicated in these situations. In this article, we will go over some of the basics of estate planning for blended families.

No Estate Plan

The worst thing you can do is have no estate plan at all. This subjects your estate to probate and the state laws of intestacy. In Arizona that could potentially mean that half of your estate will go to your current spouse and the other half will go to your children from a previous marriage. It will completely disinherit any stepchildren that you may want to provide for.

Utilizing a Trust

You can utilize a trust in a few different ways when estate planning for blended families. First, you can create a joint trust with your spouse, leaving children as the beneficiaries when you both die. The only issue with this is the spouse can change provisions after you pass and can disinherit your separate children. One way you can avoid this is by setting up an AB Trust. This allows your spouse to benefit from the income of your trust assets, but ultimately distributes your assets to your children. You can also accomplish this by each setting up your own trust. This can allow you to set limitations and responsibilities for your spouse after you pass.

Successful Estate Planning for Blended Families

Estate planning for blended families can be successful with proper planning. Make sure your wishes are clearly expressed in legal binding documents. Also ensure your family knows what to expect so they can properly carry out your wishes.

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