On its face, estate planning can seem relatively straightforward. But this is a dangerous assumption to make. In fact, those who mistakenly think that their estate plan is simple often procrastinate putting one together, which can spell all sorts of trouble later. This can be especially true for those who live in a blended family.
Why is estate planning especially important in blended families?
One of the biggest reasons to engage in effective estate planning when you’re in a blended family is to ensure that the state’s intestate succession laws don’t work against your wishes. These laws specify how your assets will be distributed if you pass away without an estate plan.
Under Michigan law, if you pass away without an estate plan, then your spouse will inherit the first $150,000 of your estate, plus half of anything else. Your children, whether with your spouse or from a prior relationship, will then inherit the rest.
That becomes problematic in instances where you don’t want a significant portion of your estate to be inherited by your spouse’s line of descendants. This is because without an estate plan, your spouse will be free to do whatever he or she wants with his or her inheritance, including cutting your children out of future inheritance. This can be a significant financial blow to your children, especially if they’re from another relationship.
What can you do to prevent this?
The good news is that estate planning gives you a whole host of tools to suit your needs. For example, you may be able to create a remainder trust that pays your spouse a certain amount over the course of his or her life, with the assets then being distributed to a named beneficiary when your spouse passes away.
But remember, this is just one of the many options that you may have at your disposal. So, if you want to make sure that you’re protecting your estate and your loved ones as fully as possible, then we encourage you to discuss your estate planning with a legal professional who is well-versed in this area of the law.