Estate Planning for Children from Previous Marriages can be tricky!
Estate Planning for Children from Previous Marriages can be complicated. When you add children from previous marriages, planning can become tricky. Typically, when you pass away all of your money will go to your spouse, and then when your spouse passes the remaining money will pass to your children. If you have children from another marriage you may want to provide an inheritance for them from the assets when you pass, since it is most likely your current spouse will not provide for them when they pass. How can you do this? You have a few different options.
This may be a simple answer to your problems. If you just wish to provide some inheritance for your children from previous marriages but not any specific property from your estate, then you may wish to utilize life insurance. If you choose to plan this way, you can either name your children as beneficiaries on the policy that you own or your children can purchase insurance policies on your life and you can pay the premiums on the policies for them. If you wish to have more control over the money, or you have minor children, you may want to create an irrevocable life insurance trust to hold the life policies and direct distributions at your death. This trust will allow your children to receive the money from your life insurance proceeds according to rules that you set up. Whether they only receive income only, delayed distributions at specific ages, or outright distributions. The options of your control are practically limitless.
If you have any IRAs or another qualified retirement accounts you can name your children as beneficiaries on these accounts. The only obstacle to consider is you must have your current spouse sign a consent to give up their right as Beneficiary to these accounts. You also need to be careful because the tax rules regarding distributions can be extremely complicated. Be sure to meet with a qualified tax professional who can help you ensure that you are in line with tax laws.
Revocable Life Insurance Trusts
One of the most secure options for estate planning with children from previous marriages is through a revocable living trust. You can put all of your different monies and assets into one trust. Through this Revocable Trust, you can allocate specified sums of monies or property to your spouse and all of your children. You have a lot of options and flexibility when it comes to how you want your property to be distributed. If you have questions regarding this process meet with a qualified professional who can answer your questions and prepare these documents for you.
Estate Planning for Children from Previous Marriages can be complicated, but it should not have to be. Whether you choose a trust, life insurance, or beneficiary designations as your option for distribution, your family will appreciate your advanced preparation. Wealth Guardian Group provides a wide range of services, from taxes to investment advice to estate planning, which can help you to get all your financial life in line.