When you are getting remarried, your existing estate plan will definitely need some adjustments. Some of them are rather self-evident, like beneficiary designation changes, and there may be other details that are somewhat complicated.
This is where we can enter the picture to provide assistance. There is generally going to be a solution that can be implemented to satisfy any objective, so we can make sure that you take the right steps to provide for your blended family.
Protecting Your Children’s Inheritances
If you are getting remarried as a parent, and there is a good chance that you will predecease your new spouse, you would be taking a risk if you leave all of your assets to your spouse. There are no guarantees with regard to their actions if you do in fact pass away first.
They could get remarried, and your children could potentially be disinherited. This possible scenario is amplified if you are entering into the marriage with a considerable store of resources.
As a response, you could enter into a premarital agreement if your fiancé is willing to do so, and there is another possible solution that will be ideal for some people.
You could cover all your bases if you establish a qualified terminable interest property (QTIP) trust. To implement this estate planning strategy, you fund the trust, and you name a trustee to act as the administrator.
Many people will use a professional fiduciary like a trust company, and this is a good choice because the trustee should be completely dispassionate. In addition to the objectivity factor, a qualified administrator will be able to effectively manage income-producing assets.
Your spouse would be the initial beneficiary of the QTIP trust, and your children would be the successor beneficiaries. If you die first, the trustee would distribute the trust’s earnings to your spouse for the rest of their life.
When you are drawing up the trust, you can give the trustee the ability to make discretionary distributions of the principal under certain circumstances. Your surviving spouse could live in a home and otherwise use property that is owned by the trust.
They would be in a comfortable position, but they would not have the ability to change the terms of the trust in any way. After their passing, your children would inherit the assets in the trust.
Prevent Family Tensions
The QTIP trust is a logical solution that makes a lot of sense, but there is an emotional element to take into consideration. There is no candy coating the fact that everyone involved will know that the children will not receive their inheritances until your surviving spouse is gone.
This can create a tense dynamic, so you may want to arrange for your children to receive some of their inheritances shortly after your passing.
End-of Life Eventualities
A properly constructed estate plan will address the eventualities that you may face toward the end of your life. Alzheimer’s disease is common among the oldest old, and there are other causes of dementia.
Cognitive impairment is one form of incapacity, and there are those that cannot communicate their own decisions because of the impact of physical ailments. If you make no preparations to brace yourself for this possibility, the state could appoint a conservator to act on your behalf.
You can take the matter into your own hands if you execute the appropriate incapacity planning documents, and one of them is a living will. This advance directive is used to state your preferences regarding the use of feeding tubes, resuscitation, and other life-support measures.
Medical situations that are not related to life-support can present themselves when you are not in a position to make your own choices. With this in mind, you can name a decision-maker in a durable power of attorney for health care.
You can also execute a durable power of attorney to empower someone to manage property on your behalf. If you have a living trust, you can name a successor trustee to act as the administrator.
We Are Here to Help!
Our doors are open if you are ready to work with a Burbank, California estate planning lawyer to develop a plan for your blended family. You can send us a message to request a consultation appointment, and we can be reached by phone at (818) 937-2335..