Joining together two families to make a new family can be a challenging yet exciting new phase of life. This blending of families to form one can happen when two people with children from other relationships decide to get married or move in together and raise the children together. Along with everything else that needs to be considered when blending families, the parents need to consider setting up their estate plans to account for their new family.
Some of the initial questions that new spouses or partners need to ask are whether or not they plan to co-mingle their funds, including pre-marital assets. If the couple is co-mingling funds, one person may still choose to put aside some pre-marital assets for his or her children. This may be an option if a parent remarries after the death of a spouse. The deceased spouse may have left a substantial estate to the surviving spouse who wishes to ensure that the children of the deceased spouse receive a large portion of that estate. The surviving spouse who decides to remarry may therefore want to put some of that money in a trust that will benefit only those children, instead of all the children of a newly blended family.
The spouses may also agree to enter into a prenuptial agreement that limits how they can inherit from each other. The agreement can also outline any limitations to their children inheriting from the step parent. It is important to remember that unless a parent adopts a step child, the step child will be left out when it comes to distributing the parent’s estate if the parent dies without a will. When a person dies without a will, the state has to determine how the person’s estate will be divided, and this is usually done based on the next blood relative. Therefore, biological children will automatically inherit under Michigan’s intestate law, but step children only inherit if they are named in a will.
Adopting step children may not always be possible, for example, if the children’s parents are divorced but both still in the picture and jointly raising the children. This is one reason why it is important to ensure that when you blend families, you formulate an estate plan that will care for all the members of your new family if this is your intention.
Other issues that should be addressed include changing the beneficiaries on existing accounts, changing the person named on a power of attorney or a health care directive if the previously named person was a former spouse, and taking out life insurance policies.
Contact Us for Legal Assistance
There are a host of other legal and financial issues to be considered when two families are blended to form one new unit. Planning ahead and executing an estate plan early can give the parents creating the new family a sense of security and avoid confusion and unintended consequences later on. In order to find out more about how an experienced estate planning attorney can help you plan for your blended family, contact Resnick Law, P.C., to consult an experienced estate planning attorneys in Bloomfield Hills and Detroit, Michigan.
(image courtesy of Igor Ovsyannykov)