Estate Read Time: 2 min

3 Estate Challenges for Blended Families

Preparing your estate can be complicated, and if you’re a part of a blended family, estate decisions can be even more complex and nuanced. Blended families take on many forms, but typically consist of couples with children from previous relationships. Here are a few case studies to help illustrate some of the challenges.

Case Study #1: Children From Previous Marriages

Simple wills often are structured to leave all assets to the surviving spouse. If your estate strategy relies on this type of will, you could risk overlooking children from previous marriages. Also, while it's unsettling to consider, the surviving spouse can end up changing a will without proper measures put in place.1

When new children join a blended family, estate strategies can get even more complicated. But with a well-structured approach, you can direct how to distribute your assets.

Case Study #2: When One Partner Has Significantly More Assets

While the divorce rate has been trending lower, the number of remarriages (2nd or more marriages) has increased. One person entering into a new marriage may have more assets than their spouse, given that 40% of all new marriages are remarriages for one or both spouses. An estate strategy can help ensure that your assets pass down according to your wishes.2

Case Study #3: Traditional Trusts May Not Be Enough

In blended families, a traditional trust is a good start, but it may not go far enough. One possible solution is to create three trusts (one for each spouse, in addition to a joint trust) to help address different scenarios.3

Using a trust involves a complex set of tax rules and regulations. Before moving forward with a trust, consider working with a professional familiar with the rules and regulations.

Starting the Process

Blended families are pretty common these days. If you’re in that position, it’s important to remember that you can create an estate strategy to address your specific situation. The first step may be an estate document review.

1. Investopedia.com, April 25, 2021
2. OnlineLibrary.Wiley.com, January 5, 2020
3. Investopedia.com, November 14, 2021

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

5 Smart Investing Strategies

5 Smart Investing Strategies

Getting what you want out of your money may require the right game plan.

The Three Keys to a Great Password

The Three Keys to a Great Password

Have fun and learn how to craft the perfect password with the help of this highly engaging infographic.

Financial Hacks for Millennials: 5 Ways to Manage Finances

Financial Hacks for Millennials: 5 Ways to Manage Finances

De-stress money management in your household with a systematic approach.

 

Have A Question About This Topic?







Thank you! Oops!

Earnings for All Seasons

Earnings season can move markets. What is it and why is it important?

Bulletproofing Your Business

Small businesses are at risk when they lose a key employee. Here’s how you can protect yourself.

Navigating Retirement Pitfalls

Why are they made again and again? Making sense of these errors in judgement.

View all articles

Inflation & Retirement

Estimate how much income may be needed at retirement to maintain your standard of living.

Comparing Mortgage Terms

Estimate the total cost in today's dollars of various mortgage alternatives.

Estimate Your RMD

Help determine the required minimum distribution from an IRA or other qualified retirement plan.

View all calculators

Managing Your Lifestyle

Using smart management to get more of what you want and free up assets to invest.

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

View all presentations

When Do You Need a Will?

When do you need a will? The answer is easy: Right Now.

The Wild West of Data Theft

Learn about cyber liability insurance in this entertaining video.

Saving for College 101

Here’s a crash course on saving for college.

View all videos