Family Dynamics
Estate Planning with stepchildren can be quite tricky. There’s more variables and people to think about than in a typical estate plan. When setting up a usual estate plan, you usually want to include your spouse, children, parents, and any other descendants. But in a blended family it can get more complicated as you might want to include your spouse and exclude any ex-spouses, you will probably want to include your children in your plan but do you want to include stepchildren? At the end of the day you decide exactly who gets what but communicating that with your family members and disputes after you pass away can make things a bit messy.
Family dynamics have significantly changed in the past few decades. Blended families are close to becoming the new normal. In 1960 only 13% of married adults were in a second marriage, that number today is 25%. Things have certainly changed in that time, and so have estate plans. Here is a quick guide and a few tips on how to go about estate planning with stepchildren.
Trust vs Will
A simple will probably won’t be enough to properly protect your assets after death. In a blended family situation a Trust is a much better alternative as it allows your inheritance to be distributed to exactly you specify in the time frame you specify.
In a will, you usually set it up for all your assets to go to your spouse after death. From there your spouse will probably make sure all their assets go to their children. But remember in a blended family you might not want everything to go to your spouse’s children.
Tips For Estate Planning with a Blended Family
- Communicate Clearly With Your Family
Communicating clearly with your family through the estate planning process is very important and especially important in blended family situations. You will probably want to avoid inheritance disputes after your passing, so it’s easier to make sure everything is clear from the start.
2. Revise Your Estate Plan Every 2-3 Years
Remember that your family will most likely change and evolve. Make sure you keep up to date on your plan and make any modifications if you seem fit. What might be true 2 years ago when you set up your plan, might not be true anymore and you may want to modify certain sections of your trust.
3. Plan for Incapacitation
Remember that estate planning is not all about your assets and properties. You have to plan for what will happen if you become incapacitated, in other words you cannot make financial or health related decisions for yourself.
To solve this, you need to set up a health care power of attorney. A health care POA will let you choose someone to make medical decisions for you if you become incapacitated.
There’s many different types of POA that you might want to set up if you have stepchildren and are in a second marriage. Such as general power of attorney or a durable power of attorney. A general POA is granted power to take over several financial decisions but it the power stops once you become incapacitated, while a durable last through incapacitation. These are all good options to think about, just make sure you pick someone you really trust to be your agent.
If you have any questions about your specific family situation and how to go about Estate Planning, feel free to contact us, we are always free to answer any questions. Thank You!
