Far too many people put off estate planning until it’s too late. There are many reasons for this procrastination. Some people think that they simply don’t need an estate plan because they have minimal assets. Others think that they can forego an estate plan because they just want their immediate loved ones to inherit everything, so they don’t need any complex paperwork dictating how their assets will be passed down.
Yet, the truth of the matter is that foregoing proper estate planning is dangerous, and it can have long-lasting implications that you may have never expected. This can be especially true if you’re in a blended family.
California’s intestate succession laws
If you pass away without any sort of estate plan in place, then your assets will be distributed in accordance with state law. These intestacy laws provide that all of your community property will be inherited by your spouse, with your spouse inheriting half of all of your individual property if you have one child, or a third of your individual property if you have two or more children.
That might sound like an okay outcome, but it can raise issues in a blended family because your spouse is under no obligation to leave those assets that he or she inherits to your biological children from another relationship. In other words, your spouse is free to leave his or her inheritance to his or her children, cutting your children out of that piece of the estate. In many instances, inheriting spouses choose to keep those assets within their own family line. Is that what you want?
Ways to deal with estate planning in a blended family
The best way to ensure that you get the outcome you want in your circumstances is to engage in sound estate planning. You can tailor your estate plan to suit your needs so that your assets are distributed exactly as you want.
One option you have at your disposal is the remainder trust. Here, you name your spouse as the beneficiary of a trust, which allows him or her to obtain payments from the trust up until his or her passing. At that time, whatever is left over in the trust is distributed to named beneficiaries, which could be your own children. This is a great way to retain control over your estate for a long time to come and ensure that your loved ones receive the financial benefits of your estate as you intend.
Another option is to simply clearly spell out which of your loved ones will receive which assets. By doing this, you can balance out your asset distribution so that your spouse doesn’t end up with more control over your assets than you would like. You can even place conditions on asset distribution that allow you to retain some sort of control over your estate and motivate your loved ones to act in a certain way.
The truth is that there are a lot of ways to protect your estate and your loved ones’ interests throughout the estate planning process. Be creative and know what you want before sitting down to create your estate plan.
Know your options
Estate planning can seem daunting simply because you don’t know the options at your disposal. But you can take control of the situation pretty easily. One way to do so is to simply meet with an attorney who is experienced in this area of the law and can guide you to where you want your estate plan to go. If that sounds enticing to you, then please consider researching our firm further to find out what we have to offer in that regard.