Couples who have blended families need to take special care when planning their estates since each partner's ultimate planning goals may be very different.
For example, a couple who each have children from a prior marriage will likely have very different estate planning goals than a couple who only have children together. Likewise, a couple who each have children from a prior marriage as well as children together will likely have unique planning needs.
The following three tips will benefit couples with blended families regardless of their ultimate estate planning goals.
When you have a blended family, one of your estate planning goals should be to keep your plan a private matter and out of the public probate court records. This can be accomplished by using a revocable living trust as the governing document of your estate plan instead of a just a will. In addition, you must fund your assets into your trust, otherwise your pour-over will may end up as a public court record.
As part of planning your estate, you will need to choose several different fiduciaries, including someone to be in charge of your will after you die, referred to as your executor or personal representative, and someone to be in charge of your trust if you become mentally incapacitated or die, referred to as your successor trustee. If you have a blended family, then your choice of executor and successor trustee will be particularly important since this fiduciary will have to answer to beneficiaries who will most likely have conflicting interests. In most situations naming a partner's family member will not be a good idea since the family member may not be able to maintain the neutrality required when dealing with beneficiaries from two different families. Instead, you should consider naming an independent individual, such as an attorney or accountant, or an institution, such as a bank or trust company, to serve as your executor and successor trustee. This will insure that the final wishes of both you and your partner are ultimately fulfilled.
For example, a couple who each have children from a prior marriage will likely have very different estate planning goals than a couple who only have children together. Likewise, a couple who each have children from a prior marriage as well as children together will likely have unique planning needs.
The following three tips will benefit couples with blended families regardless of their ultimate estate planning goals.
1. Do Not Attempt to Do Your Own Estate Plan
Estate planning is not a project you should attempt to do yourself, particularly if you and your partner have a blended family. This became evident to me a few years ago when I met with a married couple who each had children from a prior marriage and had used a computer program to draft wills and a revocable living trust. What a disaster - the wills named their children as their first executors instead of each other (and this is not what they wanted), and the final trust beneficiaries were the wife's children to the exclusion of the husband's children (again, not what they wanted). And yet the couple thought they had answered the program's questions as they had intended and put together the estate plan they had intended. Not even close. When it comes to do it yourself estate planning, just don't do it, especially if you have a blended family. Instead, work with an experienced estate planning attorney who will be able to help you and your partner put together a plan that will do exactly what you want it to do when it is needed.
2. Use a Revocable Trust to Keep Your Estate Plan Private
When you have a blended family, one of your estate planning goals should be to keep your plan a private matter and out of the public probate court records. This can be accomplished by using a revocable living trust as the governing document of your estate plan instead of a just a will. In addition, you must fund your assets into your trust, otherwise your pour-over will may end up as a public court record.
3. Choose Your Fiduciaries Wisely
As part of planning your estate, you will need to choose several different fiduciaries, including someone to be in charge of your will after you die, referred to as your executor or personal representative, and someone to be in charge of your trust if you become mentally incapacitated or die, referred to as your successor trustee. If you have a blended family, then your choice of executor and successor trustee will be particularly important since this fiduciary will have to answer to beneficiaries who will most likely have conflicting interests. In most situations naming a partner's family member will not be a good idea since the family member may not be able to maintain the neutrality required when dealing with beneficiaries from two different families. Instead, you should consider naming an independent individual, such as an attorney or accountant, or an institution, such as a bank or trust company, to serve as your executor and successor trustee. This will insure that the final wishes of both you and your partner are ultimately fulfilled.