Blended Families and Estate Planning
I have been working the last several days on a presentation titled Estate Planning for Retirement Plans to be presented at the free financial education series on retirement preparation sponsored by USU Charter Credit Union and Utah State University Extension. In doing so I was struck again by the unique estate planning needs of blended families. Blended families can involve children from a prior marriage as well as joint children. Blended families involve both younger and older couples, and nearly everyone in between.Most parents want to ensure that at least some of their assets will pass to their children. However, with blended families absent good estate planning, there is no guarantee that their children will inherit their assets. In fact, if the couple creates common “I love you” wills such that their assets pass to the survivor of them, there is a significant likelihood their children will be totally disinherited. This is because all of their assets will pass to the surviving spouse to do with as he or she pleases. This is also the case with beneficiary designations on assets like retirement accounts or life insurance.With proper planning, however, provision can be made to ensure that your spouse is cared for while and the same time making certain that the estate ultimately makes its way to your children. A sound plan would almost always include a pre-nuptial or post-nuptial agreement (preferably a pre-nuptial agreement) as well as a Living Trust. The great philosopher Yogi Berra once said: “If you don't know where you're going, you might not get there.” This reminds me of estate planning. Proper planning involves understanding our unique situation, knowing the objectives we want to achieve and then using the right tools to get us where we want to go. Blended families have unique issues and challenges – failure to plan properly will result in arriving at an unintended destination.