Why estate plans are important in blended families

On Behalf of | Dec 19, 2016 | Estate Planning

Up-to-date estate planning may be particularly important for people in Nevada with blended families. The first step is to update beneficiary designations. These should be reviewed regularly because they override what is written in a will. Therefore, if a person’s former spouse is listed as the beneficiary on their life insurance policy or retirement account, the current spouse might not receive anything even if a will says otherwise. Multiple beneficiaries are also an option with each person receiving a designated amount.

A living trust may be an effective way to manage assets in this complex family situation. For example, a person might want to arrange for their current spouse to receive distributions from assets as long as they are alive and then for their children from the previous relationship to benefit from those assets. Hiring a professional trustee rather than having the spouse or children manage the trust in these circumstances may ensure that the assets are managed in a way that is to everyone’s benefit.

People who marry later in life or have children from previous relationships might want to consider a prenuptial agreement. The agreement might specify that the assets a person brings into a marriage remain theirs and pass on to their children.

The prospect of will planning and creating a comprehensive estate plan can seem daunting, but doing so can remove a great deal of stress for loved ones. Whether or not a person is in a blended family, it is also important that they do not ignore the estate plan after preparing it. Estate plans require a regular review and may need to be updated when there are major changes in the family. Having children reach the age of 18 may also trigger a change if the plan is set up to care for minor children.