Aside from the day-to-day challenges that families face, blended families and stepfamilies face additional obstacles regarding estate planning. For example, one of the concerns often not addressed by a simple will involves leaving your entire estate to your surviving spouse.
After you pass away, your surviving spouse could exclude your children and leave all assets to your spouse's children, a new spouse, or anyone you want. Here are three estate planning pointers for blended families and stepfamilies who want protection for their families and assets.
Consider creating a Living Trust Plan
Leave your estate to a trust that your spouse can benefit from for the rest of your spouse's lifetime. By leaving your estate in a trust for your spouse, you get to control where any remaining trust assets go when your surviving spouse dies. This strategy accomplishes the dual objective of enabling your spouse to access funds while also ensuring that the remaining trust assets go to your beneficiaries when your surviving spouse passes away.
Address what will happen to your home when each spouse passes away
Blended families should address what happens to their residence when each spouse passes away. Many couples in blended families want to ensure that the surviving spouse can continue to live in the home after the first spouse passes away. You can structure your will or living trust, if you wish, to ensure that the surviving spouse cannot get kicked out of the residence by the children if the first spouse passes away.
Create your power of attorney and health care documents
A complete estate plan for blended families encompasses the durable power of attorney (POA) and health care legal documents. If you are in a blended family situation, you'll want to select the most qualified person to be your agent to act on your behalf when you get to a point during your lifetime when you cannot sign your name, pay your bills, and make your medical decisions.
Whether that person is your spouse, an adult child, or another trusted friend or relative, it's important to find someone you can depend on. Documenting your wishes might keep your spouse, children, or others from arguing about who should be making your important life decisions.