Although estate planning may seem relatively simple, depending on the size of your estate and your family dynamics, it can actually be quite challenging. Sure, you might be able to utilize a simple will, but that document may not get you what you want. And neglecting to create an appropriately thorough estate plan can leave your assets at risk of being fought over and inherited by those you don’t trust.
Why estate planning in a blended family is so important
One situation that requires thorough planning is when you’re in a blended family. Under Tennessee law, if you pass away without an estate plan, your spouse and your children will equally share your estate, except that your spouse cannot inherit less than a third of your assets. While that might sound like a reasonable outcome, it could negatively impact your children from another relationship and your grandchildren.
This is because without proper estate planning, your spouse is under no obligation to take care of your children with their inherited portion of the estate. Therefore, the amount that your spouse inherits from you may then be left to your spouse’s children to whom you have no relation. This can leave your own children and your grandchildren without the financial resources that you intended to leave for them.
What estate planning options are at your disposal?
Fortunately, there are steps that you can take to protect your interests and your estate in a blended family. For example, you may want to consider utilizing a remainder trust. Here, you specify which assets will be left to your spouse with the remainder of those assets being left to other identified beneficiaries once your spouse passes away. This can be a great way to provide direct support to your spouse while ensuring that you retain control over where those assets go later on.
You don’t have to divide assets equally
Also, don’t feel like you have to treat your spouse’s children the same as your own children in your estate plan if you don’t want to. There’s no obligation to divide your estate equally. After all, that’s one of the best things about estate planning. You can create an arrangement that is custom-tailored to fit your unique set of circumstances and your vision of the future.
Don’t forget about gifting
If you’re worried about how your estate plan is going to pan out once you’re gone, you can also consider gifting money to your loved ones while you’re still around. You can give a significant amount of money to each individual each year without facing any sort of gift tax, which means that you’ll save yourself and your loved ones some money while giving yourself the opportunity to see your loved one enjoy the money that you’ve given them.
Revisit your estate plan
When you’re in a blended family, it’s also critically important to revisit your estate plan periodically to ensure that it suits your needs. Life events like births, deaths, marriages and changed relationships can all warrant revisiting an estate plan to make changes.
Know how to develop the estate planning strategy that’s right for you
If you want the best outcome for your estate and your loved ones, you need to put in the time and effort necessary to create an appropriately thorough and targeted estate plan. We know that can sound overwhelming, especially when you’ve got enough going on in your day-to-day life, but attorneys like those at our firm stand ready to assist you so that you can rest assured that your estate plan is sound and will provide the protection that you want.