Demographers predict that blended families (stepfamilies) will be the most common type of family by the year 2015. Yet, very few resources focus on assisting this kind of family with life and estate planning. What are some ways that you can protect yourself, your children from a former marriage and your current spouse and other children?
- Replace former spouse as the named beneficiary of ERISA retirement plans.
- Replace former spouse as the named beneficiary of life insurance policies.
- Have you taken steps to protect your children’s inheritance from being controlled by your former spouse?
- Have you taken steps to protect your children’s inheritance from waste or creditors? A trust with "spendthrift" provisions may help protect a beneficiary's inheritance.
- Consider a Qualified Terminable Interest Property Trust (QTIP Trust): provides income and even principal to your new spouse for life. Upon the death of your new spouse, the QTIP Trust assets may pass to the Trust you established for your own children upon your death.
- A Credit Shelter (aka Bypass) Trust minimizes estate taxes by sheltering the maximum available exemption amount upon your death. Often used in conjunction with the QTIP Trust for your new spouse, this Credit Shelter (aka Bypass) Trust can help you minimize estate taxes, preserving wealth for your loved ones.
- Consult with qualified legal counsel.
With proper planning, spouses in blended families can provide for each other and for all of their children. For additional estate planning basics for blended families, visit:
