The average American family looks quite different today compared to years past. According to recent census data, less than half of American children grow up in a traditional nuclear family.1 Instead, children are being raised in an increasingly diverse backdrop of household types and family dynamics.
What does the “yours, mine, and ours” of combining assets and estate planning look like in today’s diverse makeup of marriages and blended families?
Estate Planning Concerns for Blended Families
Estate planning allows you to choose who receives your assets and property after you are gone. Blended families, particularly those with children from previous marriages, can make this a more challenging process, but not impossible. To address the needs and interests of all involved parties, consider the following strategies:
1. Take Time to Think
Before sitting down with your new spouse to discuss your estate plan, spend some time alone thinking about how you would like to distribute your assets. By removing yourself from potential distractions, you can get a clearer picture of your individual estate planning goals.
2. Make a List
One common estate planning mistake is being unclear about specific items you wish to leave to your children. Assets with sentimental value can cause some of the most tension during estate settlement. Writing down who you want to receive assets with sentimental value can help prevent family feuds. You may also want to take time to review asset titles on property such as real estate to understand how the ownership type may impact who receives these assets in the future.
3. Know Your Options
No two families are the same, so there is no “one-estate-plan-fits-all” scenario. For some families, a Last Will and Testament may be enough to provide for both your new spouse and your children. Some families may want to consider creating a prenuptial agreement. Others may use trusts or beneficiary designations on retirement accounts.
4. Trust the Experts
Estate planning can be a complicated process, but you don’t have to do it alone. You have resources at your fingertips to make the process simpler. Tools such as Asset Manager from Fifth Third Bank LegacyLink provide step-by-step guides and checklists and can help you keep track of your assets. You should also consult with an estate planning attorney who has experience with blended families to find the best option for your unique needs.
5. Keep the Conversation Going
Your wishes may change as time goes on, so revisit your estate plan regularly. Keep your family updated on any major changes in your estate plan and allow them time to process and ask questions. Open lines of communication can prevent inheritance disputes.