Know how to estate plan in a blended family

On Behalf of | Sep 3, 2021 | estate planning |

Living in a blended family can be enormously rewarding, but it can also have its challenges. Amongst those challenges are those pertaining to estate planning. While a lot of people choose to forego estate planning because they think that they don’t enough assets to warrant a plan, or because they simply want their assets left to their direct family members, neglecting to create an estate plan can be dangerous, especially for those in blended families.

How intestate succession affects blended families

Without an estate plan, your estate is left susceptible to intestate succession. This means that state law will dictate how your assets are divided. That might not sound like a bad thing, but in most cases the intestacy laws don’t line up with individuals’ wishes. In Illinois, those who pass away without any sort of estate plan in place will have half of their estate inherited by their spouse with the other half being inherited by their children. Sound okay?

Maybe it does. But the problem arises when your spouse passes away. Without any estate plan in place, your spouse is free to leave those assets to whomever he or she wishes. This means that the spouse who inherited very well could be keep that inheritance in his or her family line, thereby cutting out your children and your grandchildren. If you want to provide long-term support for your children and your grandchildren, then you should carefully consider whether intestate succession is really something you want enacted upon your death. If it’s not, then you should think about the other options available to you through estate planning.

The remainder trust

One commonly utilized option is the remainder trust. This estate planning vehicle allows you to leave assets to your spouse in a way that provides consistent payments to him or her over the course of his or her life. This provides financial stability to your spouse without depleting your estate’s assets. Then, once your spouse passes away, whatever is left over in the trust, known as the remainder, is distributed to a named beneficiary. This could be your children, your grandchildren, or anyone else who you want to inherit. In other words, the remainder trust allows you to retain control over trust assets for a significant period of time to come, which can ensure that you protect the interests of those you love as fully as possible.

Create the estate plan that is right for you

Using a remainder trust is just one option that’s available to you through the estate planning process. You can also simply shift your assets around in your estate plan so that your loved ones receive exactly what you want them to receive without any confusion. You can also utilize incentive trusts that allow your loved ones to reach all trust assets once they meet a certain condition, such as by graduating college. The options are nearly limitless, which is one of the greatest benefits of estate planning. You’re in control of the future of your estate.

That being said, we know that estate planning can seem daunting, and merely broaching the topic of death can be tough. But this isn’t a process that you have to face alone. There are a whole host of people out there ready to support you as you figure out what is best for you, your estate, and your family. You just have to take that first proactive step in choosing to take control over the future.