Parents who remarry embark upon a big new adventure. Ideally, they will have a wonderful and fruitful marriage with the kids mixing it up like the Brady Bunch. But while a new love and an expanded family are now a fact of life, it is smart for you and your spouse to update or create a new estate plan. It needs to reflect these important life changes.
Important issues to address
One could never imagine Mike Brady losing touch with the girls after Carol died, or Carol giving Mike’s architecture firm to Jan and Cindy when it was promised to the boys. Every family is different, but getting the new family’s estate plans in writing can save heartache and anger after a parent passes.
- A simple will may not work: Leaving everything to the second spouse may be a mistake if there is a family business or other assets like a longtime vacation home that needs to stay with the biological or adoptive family.
- Design a trust: You can set up a trust that provides for your spouse while they are alive but then moves assets to the children once she or he passes.
- Pick the right trustee: The inclination will be to pick a spouse or adult child, but it may make more sense to choose a neutral third party who understands finances and trusts.
- Remarriage: It could be a nightmare if a spouse controlling the estate remarries and then passes your assets to their new spouse, who may subsequently pass it to their children.
- Pass some assets to the children: It may be helpful (and likely welcome) to pass them a business, property, or money.
- Health care decisions: If you become incapacitated, the health care power of attorney is generally held by one person. Have clear instructions of quality of life and medical care in there is debilitating illness or incapacitation. Moreover, this person could theoretically limit other family members’ access, creating a lot of undue frustration, pain and pettiness.
Things change
A parent’s death can change any family’s dynamic overnight, much less one consisting of a larger blended family. So, it is essential to make sure that the estate has plans for all foreseeable issues, regardless of how far-fetched they seem when you draft it. These thoughtful guidelines can go a long way towards maintaining that Brady Bunch-like harmony long after one or both parents die.