More than half of all marriages end in divorce, and 75 percent of those who end up divorced will remarry. Research indicates that 65 percent of these relationships will result in more children. Today, 40 percent of adults have at least one step-relative.
Therefore, when your life changes, your estate planning goals change as well. Over the past few years, we prepare far more “blended family” estate plans than “traditional” estate plans. It’s free to find out your options and it is also a good time to make sure you have update everything regarding your life insurance and retirement plan beneficiaries.
Here are some tips to help you with your planning:
- Disinherit your former spouse. After a divorce, consider disinheriting your spouse to prevent him or her from getting assets after your death. This may include amending any joint ownerships and updating any beneficiary designations on life insurance policies, retirement accounts, or bank accounts.
- Update your beneficiaries. Not only do you need to remove your old spouse from beneficiary designations, you need to add your new one, or change it to your children if you wish. Remember, beneficiary designations will override a will if the two don’t agree, so don’t rely on a will to do all the work.
- Create Revocable trusts. You can have as many trusts as you want. Some people who get remarried create 3 trusts in order to accomplish their goals. Each spouse creates a separate property trust where particular assets go to each spouse’s children and then also create a community property trust where they put new assets acquired during the course of the new marriage into the joint trust. A revocable trust is effective upon signing and funding it with assets. During your lifetime, you can amend it, change it, or terminate it. This can help your family avoid the hassle of a probate after your death and also the intended beneficiaries receive the correct gifts.
Over the past 31 years, the Law Offices of Christopher A. Benson has helped more than 900 clients prepare and utilize simple and effective planning techniques to protect them and their families in order to avoid probate, save estate taxes, save money and save added emotional burden that comes from long term illness and/or death of a family member. Give us a call to schedule a free consultation to find out how we can help you and your family.