Today, blended families are more common than ever, and according to Pew Research Center, the amount of people who have been married more than once has doubled since 1980. Because it’s becoming the norm and the issue is so much more complicated than most people realize, we wanted to share information about blended family estate planning.
The Necessity of Estate Planning in Blended Families
While we understand it’s not an enjoyable topic, it’s important to recognize how important it is to not only have a will, but to create a complete estate plan. Otherwise, if you are unable to make decisions on your own behalf or you pass away without your wishes being known, this can lead to drawn out legal battles and fractured relationships.
Without a will, your estate will most likely end up in probate, a lengthy legal process in which your assets are divided based on North Carolina laws of inheritance. Your wishes will not be carried out, and your property will most likely be divided among your spouse and your children, especially if they are adults. Your stepchildren will likely be left out of your estate.
Instead, a complete estate plan ensures your wishes will be carried out, including:
- Living will - outlines your wishes related to medical treatments.
- Healthcare power of attorney - someone to make healthcare decisions on your behalf.
- Durable power of attorney - someone to make legal and financial decisions on your behalf.
- Will - distributes your assets to people of your choosing as well as names guardians to minor children.
Distinctions Between Children and Stepchildren
Many people don’t realize that the law in North Carolina does make a distinction between children and stepchildren. If you make provisions such as wishing your assets are shared equally among your children, your stepchildren will not be included; including your stepchildren must be specified. The key to successful estate planning is clarity and candor, and this is especially true when you have a blended family.
Options for Estate Planning for Blended Families
Depending on your family, a will alone may not be the right option. For example, if both spouses have minor children from previous marriages as well as children together, and your will leaves money to your spouse, your children from a previous marriage may be left out of inheriting your assets.
Setting Up Trusts
Setting up individual trusts with assets and property for your children and stepchildren prior to your passing can ensure that they are taken care of after you are gone while still leaving assets to your spouse. However, you do need to name a trustee who you can rely upon to use good judgement when overseeing the assets before minor children come of age.
Life Insurance Policies and Retirement
Another option to care for children and stepchildren is to take out life insurance. Your will can direct that your assets go to your spouse, but you can take out a life insurance policy naming your children, stepchildren, or both, as the beneficiaries. Similarly, your retirement accounts go to a named primary beneficiary, regardless of your will. Check to see who your primary beneficiary is and update it to be the person you choose.
Talk to Your Family About Your Wishes
As we noted, talking about blended family estate planning is difficult, but it’s important to be honest with your spouse about what you want after your passing, whether this means leaving stepchildren out of your will or including them. Talking about it now and working with an experienced attorney is key to making sure that your wishes are honored and that all members of the family are treated with respect. Putting it off can lead to lengthy legal problems and fractured relationships.
Schedule a Consultation with an Estate Planning Attorney
Providing for your family after you are gone is a challenge, and having a blended family makes it even more difficult. Estate planning attorney Hank Doyle has over 25 years of experience helping families in these circumstances. With a law firm in Wake Forest and Cary, we serve a wide area around Raleigh. Reach out today at (919) 228-4487 or fill out the form below to schedule a consultation and discuss your estate planning needs.