Blended families are very common, but estate planning for a blended family can come with a set of challenges to consider. This article will summarize 5 blended family mistakes to avoid, with content referenced from: https://www.aarp.org/retirement/planning-for-retirement/info-2021/blended-family-estate-planning-mistakes-to-avoid.html
Not Changing Beneficiaries.
One of the most common mistakes is failing to update wills or beneficiary designations. It’s not unusual that the ex-spouse may be inadvertently left as a beneficiary. Make sure that you have properly updated the beneficiary on all stock accounts, life insurance, bank accounts, and all other type of account with a beneficiary designation.
- Treating All Heirs Equally.
It’s important to give extensive thought to the needs of each of the children and the assets that you have. For example, you may have some children with different ages, earning capacities, or lifestyles. You can treat heirs equitably without treating them all equally. You may see that one possible heir might have special needs or disabilities. One spouse may have greater assets going into the marriage than the other and want some of those proceeds to go to certain heirs. Every person’s situation is different, but careful consideration of your heirs and their needs will help you plan wisely.
- Waiting Until You Are Gone to Give.
You may want to give your heirs a gift when you are alive to see them enjoy it. You can gift up to $15,000 a year (in 2021) without a tax consequence. See https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes
Skipping the Lawyer.
If you are older and on your second marriage, it’s likely that your estate plan may be somewhat complicated. Ex-spouses, blended families and comingled assets can add to the complexity. For this reason, investing the time and money in getting a thorough estate plan may give you the comfort of knowing that the plan you have is sound and solid.
Consult with the Law Office of David Knecht
At the Law Office of David Knecht, at 707-451-4502, we have extensive experience in estate planning and can help you create a plan that addresses the needs of you and your family and accomplishes your goals.
