When people are caught up in the financial and emotional upheaval of divorce, they tend to be focused on the present moment. It is only after the dust has settled that we begin to assess our lives, including our future plans.
Cincinnati-area residents who remarry can get lost in the complexities of estate planning, especially if they do not update important documents when certain life events occur such as:
- A move out of state
- A change in jobs or financial holdings
- A birth
- A death in the family
Any of these events may call for revisions to their estate plan, such as adding or taking off beneficiary designations, or altering asset sources for a trust or bequest. Neglecting these details can lead to unnecessary conflicts within blended families that may not play out until far into the future.
Estate-planning challenges for blended families
People who remarry sometimes don’t take into account the connections that remain from the previous relationship. Reviewing their estate plan must become a priority, especially if they don’t want to shut out their children from the first marriage but also do not want their ex to inherit everything, either. This also means changing life insurance and as well as 401(k) beneficiary designations to reflect your changed relationship, with your children remaining as secondary beneficiaries.
People also bring their own financial assets into the new union, and often their own children as well. When they create wills, they usually designate each other as beneficiaries with children inheriting all assets when the surviving parent dies. But without special wording that treats the children of both parents equally, only the child of the surviving parent would inherit assets, not the stepchildren. When clarifying your intentions in the will, don’t forget bequests to children who are still living with the ex.
Navigating estate planning strategies
Setting up a revocable trust that keeps your assets separate when you remarry allows more flexibility to designate beneficiaries, and it also avoids conflicts by keeping your assets in trust and both households separate. It is important when making updates to your documents that family members be informed of the changes. If possible, allowing former and current spouses to discuss what is fair to the children can create an amicable way forward to minimize conflicts.