The family structures and legal relationships within blended families introduce a layer of complexity that makes planning for your loved ones’ futures, a future beyond your lifetime, more crucial than ever.
Everyone needs an estate plan, whether your net worth adds up to a few thousand dollars or a few million. Your plan should address the needs of all of your loved ones at your death, regardless of whether you have a traditional or a blended family, are single, or married.
One of the most important documents you can create to ensure the well-being of your loved ones is a will. If you die without a will, state law determines who gets your assets when you pass away, typically naming a surviving spouse and direct descendants. With a blended family, however, the issues are more complex, and the risk of disinheriting your children is much higher.
It’s not uncommon to preserve assets like family heirlooms, the family home, or a closely held business for your own children while still providing for a second spouse. But you must be careful that your estate plan properly reflects your situation, or your children from a previous marriage might be disinherited.
In the absence of an estate plan, a married couple with kids from separate relationships will have their assets divided by the laws of their state. If special arrangements are meant for each child, they will not be known. All assets—including retirement funds, jointly held property, and checking and savings accounts—will be directed by law.
It’s critical to create an estate plan that articulates where your assets go at the death of each parent. Provisions for each child individually as well as your spouse or partner should be documented.
A will—The cornerstone of your estate plan, this document ensures your assets will be distributed exactly as you intend. Your will should also name a guardian for any minor children.
Trusts—A trust allows you to make special arrangements for the management of your assets. Special trusts can protect assets for your children from a previous marriage and still provide for your new spouse. Be sure to ask your attorney if these special trusts are right for you.
Financial and health care powers of attorney—A financial power of attorney designates a trusted individual to handle legal and financial matters on your behalf. If you are unable to make health care decisions, a health care power of attorney stipulates who will make these decisions.
A living will—Also called an advance health care directive, this document articulates your wishes concerning heroic, life-sustaining measures.
Ownership and beneficiary designations—Jointly owned property with rights of survivorship generally passes to the surviving joint owner regardless of what your will states. The same is true for one-half of community property in several states. Life insurance, IRAs, and other retirement plans are payable to beneficiaries you designate on the account.
When creating or updating your estate plan, don’t forget the causes and organizations important to you. If you would like to include us in your future plans, please contact Carnegie Hall to plan a gift that fits the needs of your family.
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