Estate planning becomes especially crucial when you’re a member of a blended family. Naturally, you aim to safeguard and support your present spouse, but you also have the important objective of preserving assets earmarked for your children from a prior relationship. Fortunately, through careful estate planning, you can successfully achieve both objectives. Toward that end, a Murfreesboro estate planning attorney at Bennett | Michael | Hornsby discusses how to include your blended family in your estate plan.
Are You Part of a Blended Family?
We are all familiar with divorce statistics, indicating that roughly half of all initial marriages in the United States result in divorce. Of those individuals, more than half proceed to remarry or enter into another long-term relationship. Consequently, The Step Family Foundation reports that approximately 1,300 new stepfamilies are created every day, with 50 percent of the 60 million children under the age of 13 currently residing with one biological parent and that parent’s current partner. While blended families face numerous emotional and practical challenges when attempting to merge two households into a harmonious unit, there are also estate planning considerations that must be addressed in the context of a blended family.
Protecting Your Blended Family in Your Estate Plan
There is no universal approach to estate planning for blended families. This means that you will need to collaborate with an experienced estate planning attorney to ensure that your estate plan fulfills all your requirements and achieves your objectives. Nevertheless, there are some fundamental steps that most blended families should take when crafting an estate plan, such as:
- Gain a Comprehensive Understanding of Debts and Assets. You must have a clear and accurate overview of the debts and assets that each party brings into the marriage because creating a successful estate plan relies on knowing which assets and debts need to be considered in the plan.
- Familiarize Yourself with State Inheritance Laws. It is essential to understand your state’s inheritance laws to grasp what will occur with your assets if they are not passed down in your estate plan. For example, many states, including Tennessee, allow a spouse to “take against the Will.” In practice, this means that a spouse can elect to take a certain percentage or specific amount of assets regardless of what a decedent’s Will dictates.
- Update Beneficiaries and Fiduciaries. If you already have an estate plan, you will likely want to review it and update beneficiaries and fiduciaries. Beneficiaries can be found in various documents, including your Last Will and Testament, trust agreements, retirement plans, and life insurance policies. Fiduciaries include individuals such as the Executor of your estate, the Trustee of an existing trust, and an Agent in a Power of Attorney. To understand the importance of this step, consider whether you want your former spouse to be the Agent in your Power of Attorney now that you are remarried.
- Establish or Update an Incapacity Plan. An incapacity plan is vital for everyone, but it assumes even greater significance in a blended family. You must ensure that your new spouse has the legal authority to manage your assets and make medical decisions on your behalf if you become incapacitated, provided that aligns with your wishes. Once again, you likely want to make sure that your current spouse is your Agent in a healthcare Power of Attorney and/or the successor Trustee in a revocable living trust.
- Consider Establishing a QTIP Trust. A commonly used tool in estate planning for blended families is the Qualified Terminable Interest Property (QTIP) trust. This trust can provide for your current spouse while simultaneously safeguarding assets designated for your children from a prior relationship. Assets held within a QTIP trust are not directly owned or accessible by your spouse; however, your spouse will receive income from the trust and may have a life estate in the marital home. Ultimately, your children will inherit the trust assets upon the death of your surviving spouse.
Contact a Murfreesboro Estate Planning Attorney
If you have additional questions or concerns about how to include your blended family in your estate plan, consult with an experienced Murfreesboro estate planning attorney at Bennett | Michael | Hornsby as soon as possible. Contact the team today by calling 615-898-1560 to schedule your free appointment.
- DUI in Tennessee: Understanding How a Breath Test Works - September 21, 2023
- Can a Child Decide Which Parent to Live with in a Tennessee Divorce? - September 14, 2023
- How to Include Your Blended Family in Your Estate Plan - September 7, 2023