The first spouse who dies trust often provides the surviving spouse. Then, upon the death of the surviving spouse, the assets are distributed to the biological children of the first spouse. If there are three children, an equal division obviously means that each will receive one-third of the remaining estate after both parents have died. Andy, widower (5 years old), marries Paris (2 years old) Andy has two children, Alexis (2 years old) and Lauren (2 years old) from his previous marriage to Maureen.
Andy wants to support his wife but doesn't want to disinherit his children. Create a trust that names your two children as remaining beneficiaries. Andy dies and his children eventually become resentful for having to wait until Paris's death to receive his inheritance. Litigation instituted with Paris over extravagant trust distributions.
Married people usually leave everything to others in their wills. If you die first, your spouse will be the absolute owner of all your property. Blended families face unique challenges when it comes to estate planning. It is important to plan your estate in a way that allows you to choose who inherits your assets so that each member of the family feels valued.
Because of this, combining two families can be more complex and require advance planning, with clearly defined goals and open communication with all family members. You may need to protect the assets of former family members, spouses, or domestic partners, or you may want to make sure your estate plan is aligned with your current relationships in life. For the long-term blended family, planning must be intentional. However, there may be less concern that the surviving spouse will change beneficiaries and deprive the other spouse's children of their inheritance.
The estate planning lawyer should still consider this as a possibility. As you choose the beneficiaries of the life insurance policy, ILITs also prevent family members from being disinherited. In addition, an ILIT could be a good solution if the wife in the previous example was concerned that after her death the husband would leave everything to his children and disinherit his children, assuming he was planning to leave all his estate to him. The concept of a close relative is not complicated, but it varies by state and also determines who inherits if you die without a will.
If one spouse dies and the survivor remarries and names a new spouse as the beneficiary, all children may lose their inheritance. You have to decide how important that risk is given your children's temperament, their relationships with each other, and whether any risk of leaving an unequal inheritance is worth what you're trying to achieve. In this way, his children would have inherited their share at the moment Harry dies guaranteeing his inheritance. After Wilma's death, Harry's children won't be happy to know they're not inheriting anything from their father.
However, there are situations where children are excluded from their inheritance or a former spouse inherits everything, even if that was not the plan. ILITs are beneficial because they ensure that children or other family members receive an inheritance. If one person owned the home, for example, and a second spouse and children moved into the home, the wish could be that only the children of the original owner inherited the proceeds of the sale of the home. Wilma then decides to change her will to leave all the combined assets to her two children, thus excluding Harry's three children from their father's inheritance.
In many second marriages, estate planning is done in the hope that the spouse will inherit all property and, upon death, the remaining assets are divided among all children. Other challenges that could arise include the potential for family members to disinherit, the possibility that wills or beneficiary designations will not be updated, or delays in the inheritance of siblings until the spouse of their parents has died. .