It doesn’t take an expert to see that the landscape of the modern family is changing a lot these days. From second and third marriages to long term relationships that do not lead to marriage, to relationships that yield children but no long term commitment, there is no one way to create a family these days. As a result, there is no one way to create an appropriate estate plan that will account for everyone who you consider family. Estate planning is one of the areas of life where we have to take a step back and carefully consider the best way to care for our loved ones.
For people who have blended families this often means taking careful steps to make sure everyone is provided for in an appropriate way, since default probate laws might not see your family the same way you do.
One effective way to manage estate planning for a blended family is to use a trust or several trusts. Trusts are helpful because they can include very specific directions for distributing funds. They can also be funded using assets that are sold and converted to cash after one’s passing. Trusts can also be funded using life insurance proceeds. By utilizing these methods of managing assets and providing clear instructions for distributions, each member of the family has the best possibility of getting the gift that was intended for them.
Of course, this is not the only possibility for creating an effective estate plan. Every family is different and it is best to find a personalized way to manage assets and gifts.
Source: Green Bay Press Gazette, “Estate planning for blended families,” Clarissa Giebel, Jan. 27, 2014.