When you have children from multiple spouses or stepchildren, estate planning can be especially difficult. It is not always easy to make everyone happy with their inheritance.
In the United States today people often divorce and get remarried. When The Brady Bunch first aired, part of its appeal was the novelty of two families blending together. However, today that is normal for many American families. This creates special problems in estate planning because it is often difficult to know how to properly provide for a new spouse, children from a previous marriage, and even for stepchildren. A recent article in The Street, titled “6 Things to Consider When Estate planning for Your Second Family,” lists 6 things you should consider when planning your estate with a second family:
- How Long Your Family Has Been Together – If your children and stepchildren all grew up together as part of the same family, then it makes sense to treat them equally in an estate plan. However, if your children were adults when you remarried, then they should be treated differently than stepchildren.
- Provide for Your Children Immediately – You do want to provide for your second spouse. On the other hand, you do not want your adult children to wait until their stepmother dies to receive their inheritances.
- Plan for the Home – Make sure that you have a plan in place for your spouse to either keep the home or find somewhere else to live.
- Think About Family Happiness Before Taxes – It might not be possible to keep everyone happy in a way that minimizes the estate tax. In this case, family harmony should probably come first to avoid costly litigation over the estate.
- Communication – Make sure everyone knows what they are getting and why.
- Hire an Attorney – With a blended family it is imperative that you hire an attorney to make sure that your estate plan is properly structured.
This last point cannot be emphasized too much. Just read through all of the “disclaimers” required by the online do-it-yourself legal document preparation services. Where will they be when your estate plan runs aground?
Reference: The Street (August 7, 2014) “6 Things to Consider When Estate planning for Your Second Family