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Planning for Blended Families


It is relatively easy to plan when spouses are also the parents of all of the children. There is little concern if assets are distributed to the surviving spouse when he or she shares your concerns and desires to benefit your children. Burt, there are special problems when both spouses have children from a prior relationship.

How do you balance the desire to provide for your surviving spouse and provide an inheritance to your children?

  • If you leave everything to your spouse with the expectation that he or she will provide for your children after his or her death. The surviving spouse always has the right to change the beneficiaries of his or her estate. you may be surprised at how his or her estate plan can change to benefit their own children at the expense of your own.
  • If you want to guarantee your children's inheritance, you may decide to use a spousal trust as apposed to an outright distributionn to the surviving spouse.
  • You need to carefully evaluate the surviving spouse's needs in designing your plan.
  • Can you design a plan that will allow you to provide an immediate inheritance for your children while adequately protecting your spouse?
  • Who should serve as the trustee of a spousal trust?
  • What happens in the event the surviving spouse remarries?
  • How should you plan to maximize the unlimited marital deduction for estate taxes?
  • How do you coordinate beneficiary designations with the spousal trust?
  • How do you protect the income tax benefits when a surviving spouse is the beneficiary of an IRA or qualified retirement plan?

How do you avoid conflict between the surviving spouse and your children after your death?

  • If you provide for the surviving spouse using a lifetime trust, will your children become estranged if they have to wait for their inheritance?
  • Do you include your children in the spousal trust?
  • Who serves as the trustee of the spousal trust?
  • Should you select your child to serve as the Agent under your Power of Attorney?
  • Who should make medical decisions if you are incapacitated? If you choose your spouse, how will your children react to your spouse's decisions?
These are just a few of the questions that you will need to answer in planning for your blended family.


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