To Consider When Estate Planning for Blended Families
Estate Planning for Blended Families
By Matthew A. Ferri, Esq. A blended family could impact your life in a lot of ways, in particular it can affect how you approach your estate plan. There can be many people to take into consideration when estate planning for blended families. It is important to acknowledge each person, so all your wishes are met.
Estate Planning for Blended Families – Division of Assets
When planning, you have to decide how the families are going to split inheritances. Will both families share equally? Will your assets stay in your family and your spouse’s stay with theirs? Are there multiple homes to plan for? Proactively making these decisions and others can ease the transition if something happens to you or your spouse. And having a properly executed estate plan in place can help ensure your wishes are met.
Blended Families – Trustees and Agents
You’ll also have to decide who is going to fill certain roles. You would likely want your new spouse to make financial or medical decisions on your behalf if you couldn’t make them yourself. But, if your spouse couldn’t act in either role, would you name one of your children? One of theirs? You should consider who you think is best for the role, and make sure that individual knows what kind of care you would like to receive in various scenarios.
Government Imposed Estate Plan
By failing to plan, a plan has already been made for you. The state of Michigan’s plan will control, and you might not agree with what it says. Under the state’s plan, your spouse would inherit the majority of your estate, and then would be free to leave that wealth or those assets to whoever they choose and that doesn’t have to include your children. On the opposite end, under the state’s plan, your spouse’s children will likely not inherit, even if you would want them to get something, unless you legally adopted them. Simply changing their last name is not enough, it must be a legal adoption. Step-children and foster children do not inherit, unless named in your estate plan.
Ex-Spouses and Prior Children
You should also make sure you don’t fail to update your plan. A major concern after most divorces is the need to disinherit any ex-spouse. Throughout a previous marriage, it is likely your ex-spouse was designated as a beneficiary on one or more of your assets. Just because you went through a divorce, doesn’t mean financial institutions will change your beneficiaries. If you wish to disinherit your ex-spouse, the designation of beneficiary must be updated.
Additionally, if any children from a previous marriage are minors, you should make sure you properly plan for that. Otherwise, your ex-spouse may be put in charge of their inheritances and that may not be your wishes. To make sure your plan is set up in the way you want, with the people you want, and so you remain in control, you should meet with an estate planning attorney to cover all potential considerations, some you may not have even thought about.
If you have questions or would like to learn more about how to plan for you and your blended family, you can contact our office to set up a complimentary initial consultation, (248) 409-0256.
About the Author
Matthew A. Ferri, J.D., M.B.A., is the Founder and Principal of LifeFocus Planning®, a Michigan based estate planning law firm. He is an estate planning attorney with offices in Bloomfield Hills, Michigan and Shelby Township, Michigan. His expertise includes advanced estate planning, elder law, Medicaid planning, Veterans benefits, special needs planning, and business planning. During law school, Matt focused his studies on business law while simultaneously earning his MBA. After graduation, Matt started his own firm with the goal of helping individuals and their families develop estate plans that work. He received the rating of AV Preeminent® by Martindale-Hubbell: The highest peer rating standard. This rating signifies that a large number of his peers rank him at the highest level of professional excellence for his legal knowledge.