Estate planning is essential and beneficial for all families. Through estate planning, individuals can ensure their loved ones are taken care of after their death.
However, estate planning for blended families can be challenging. There may be questions about dividing assets among children from a previous relationship and the children of the marriage. A spouse might want to protect family heirlooms from being transferred to non-blood relatives. Below are five tips for estate planning for blended families from our California estate planning attorney.
1. Consider a Trust Agreement
A will allows you to control how your assets are distributed after your death. Without a valid will, California intestate laws dictate who receives your property when you die. At a minimum, you will want to have a valid will in place before you get married, so that your intended beneficiaries are protected.
You can better ensure that your children from a previous relationship receive certain assets by placing those assets in a trust. The assets pass outside of your estate to the beneficiaries. A trust agreement can also be very useful when your children are minors. A trustee manages the trust assets for your children’s benefit after you die, according to the terms you establish when you create the trust.
2. Do Not Forget Life Insurance and Retirement Accounts
Life insurance and retirement accounts pass directly to the named beneficiary instead of going through the estate. Make sure that you update your beneficiaries after a divorce. You can name a trust as the beneficiary if your children are minors at the time of your death.
3. Advance Health Care Directives
When you remarry, your spouse has the legal authority to make healthcare decisions for you unless you appoint another person to make those decisions. For parents with adult children, there could be a question of whether the adult children should make those decisions for their parent instead of the new spouse.
If you want your adult children to make healthcare decisions for you, at a later time when you can no longer make those decisions for yourself, you need to execute legal documents giving that authority to your children. You should discuss executing an Advance Health Care Directive with your California estate planning lawyer.
4. Consider a Premarital Agreement
Premarital agreements can resolve some of the issues that blended families might have regarding estate planning. The marital agreement can include terms related to the rights of the parties during a divorce and the rights of a surviving spouse in the estate of a deceased spouse. The parties may also designate property that will remain separate property during the marriage, so that property is not subject to property division if the couple divorces.
California’s Family Code has strict requirements to ensure that a premarital agreement is valid. You and your prospective spouse should each consult your own California family law attorney to ensure that the premarital agreement adequately protects the rights of both spouses.
Marital agreements do not take the place of estate planning. An individual or couple should have wills, a trust, and other estate planning documents even if the couple enters a premarital agreement.
Contact a California Estate Planning Attorney for Help
Blended families are becoming more common. Deciding how to protect your spouse and your children if you die can be challenging. Consulting a California estate planning attorney is the best way to learn about the laws governing estates and inheritances so that you can make informed decisions about protecting all the people you love. Contact our office today.