Even the most diligent efforts to take care of current and future financial needs of family members can be neglected during the consequential life changes that take place with divorce and remarriage. Unfortunately, many American put off or do not update important estate planning documents, and more than two-thirds of Americans do not have an up-to-date will.
For those who have blended families, estate planning can become exponentially more complicated if beneficiary designations cross state lines or include people who are not blood-related. Emotional issues, such as when there are competing interests between children, stepchildren and a new spouse, can further aggravate the best-intentioned attempts at financial planning.
Starting a new family
When an ex-spouse begins a new family after divorce, their role and financial responsibilities with the first family often do not end. But adding on responsibilities to a new spouse and children can complicate these ties, especially when it comes to estate planning for all.
Important documents need to be updated with each life change in order to prevent some children from inadvertently being disinherited, assets being claimed by the former spouse or challenges to property division later on during probate.
Separating finances while providing for everyone
It is important to create a separation between households that will avoid conflicts in financial matters for blended families. Reviewing the estate’s current financial state and future bequests is necessary as an individual enters into new life circumstances.
When creating or changing beneficiary designations, making sure that family members are aware of your intentions guarantees a consistency of information that will prevent false expectations. Having current and former spouses help with deciding what is fair to the children and stepchildren will ward off future misunderstandings.
It can be useful to set up a revocable trust for the benefit of a surviving spouse after the first spouse has passed away. Since the primary trustee is usually the surviving spouse, choosing a backup trustee maybe be critical in order to prevent that spouse from draining the trust, which could end up disinheriting the children in the process.
Effective estate planning is important for individuals and families who have unique circumstances. Having experienced legal resources can provide guidance and support for even the most complex estate planning issues to individuals living in western Pennsylvania.