Concerns when estate planning for blended families

Many residents in New York who are planning to get married may well have been married before. According to the Pew Research Center, in 2013 both spouses in one out of every five marrying couples were getting married for the second or subsequent time. In four out of every 10 marrying couples, one spouse had previously been married. These realities bring new concerns to the forefront when looking at making a good estate plan.

Concerns involve how to appropriately direct the assets each partner brings to the marriage but also how co-mingled or joint assets may be handled. Forbes explains that a trust may not always be sufficient even thought it can be a valuable tool. Some assets are simply not listed in a trust as they are not titled items, therefore making the  use of a will a wise complement to even the best trust.

Another thing people should not overlook is their choice of beneficiary designation for bank accounts, retirement accounts or life insurance policies. These designations will take precedence over any terms in a trust or a will. When choosing a trust, Fidelity Investments indicates that there are some special types of trusts that may be well-suited to blended families. Two examples include the irrevocable life insurance trust and the qualified terminable interest property trust.

Proper estate planning may help remarried couples avoid situations where one partner inherits the others’ assets after the first one dies and then those assets are passed onto only the surviving spouse’s children after that person dies, leaving the children of the spouse who dies first with nothing.