Estate Planning With A Second Family In Mind

More and more people are getting married a second time and find themselves with two families. Estate planning for one family is hard enough, but it can be quite complex if you have a second one to provide for.

That’s why I thought it would be helpful for me to post this article I found on Yahoo Finance last week. It deals with the issues that families with a mix of biological children, stepchildren, first spouses and second spouses must face.

(Photo credit: Wikipedia)

(Photo credit: Wikipedia)

If you find yourself in this position, you don’t want to leave your heirs from the two families to fight it out over who gets what. The article lists the six most important things to remember when estate planning for a blended family.

Here are the six things to keep in mind, at least as outlined in the article:

  • It depends on how long your family has been together. If you and your second spouse married when your children were still young, or you had children together, you are really one big family. You should proceed with your will as if all your children were your biological children and your second spouse is your first spouse. But if your children were teenagers or adults when you remarried, things are different. You may want to make separate provisions for your biological children and your stepchildren.
  • Make provisions for your second spouse, but first make plans to provide for your children immediately. They should not have to wait until your second spouse dies before getting an inheritance.
  • Make a plan for your home. If your children grew up in your home, they may have more of a claim to it than does your second spouse. If they never grew up there, it belongs to your second spouse.
  • Taxes are less important than family harmony. Equal distribution may trump taxes, If you leave everything to your spouse to save on taxes, your children won’t be happy.
  • Communicate with everyone, either one at a time or as a group. It may be uncomfortable, but it will work out better, especially if you tell them your ideas and ask for their input.
  • Make sure you have the right experts. The right estate planning lawyer and financial planner are critical. You may even need a family therapist.

Planning for blended families can be challenging. But each family’s circumstances are different. I would be happy to review the options that best suit your family’s particular situation.

Eyes Wide Open—What You Need To Know Before Remarrying In Retirement

Several weeks ago, I posted an article about senior dating and some of the resources available to help seniors who are divorced or widowed find a new partner. The article also mentioned that for various reasons, many seniors who do meet that special someone are reluctant to get remarried. But what if you do want to marry your new love? A recent article in USA Today addresses some of the issues couples need to consider before walking down the aisle again.

A couple of 14-carat gold wedding rings. Pictu...

(Photo credit: Wikipedia)

Discuss each of your finances openly
Does your prospective spouse carry a lot of debt? Have either of you co-signed loans to help children from previous marriages? Questions like these need be asked before the marriage, not after. Many people are embarrassed about their debt and reluctant to discuss it. You should also review one another’s credit reports.

Don’t forget to change your beneficiaries
If you have a life insurance policy, an annuity, an IRA, or any other retirement account, review each of them and make sure beneficiary designations reflect your new relationship.

Think about getting a prenuptial agreement
It’s not the most romantic topic to bring up with your new love, but virtually every senior considering remarriage should have one.

Think twice before adding your new spouse’s name to your home
This is often one of the most contentious issues in second and third marriages. Children from previous marriages can feel particularly threatened by the potential loss of the family home. Instead of adding your new spouse’s name to the home, it is more prudent to give him or her occupancy rights.

If you are a senior considering remarriage, I invite you to contact me to discuss issues like these and any other concerns you might have.

Enhanced by Zemanta