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How estate planning works for blended families

On Behalf of | Aug 29, 2023 | Estate Planning

When you’ve remarried and have a blended family with stepchildren and other heirs who aren’t biologically related to you, the matter of estate planning isn’t as clear-cut. There are special considerations that you’ll need to make regarding your beneficiaries and what you’ll give to them.

Neglecting to change beneficiaries

An extremely common mistake in estate planning is that people don’t change beneficiaries. The process of naming beneficiaries makes it easier for the funds to go to who you intend, such as your spouse. Check over your financial accounts, including life insurance, so that you know for a fact you have designated the right beneficiary. Remember to update your medical power of attorney to ensure that the correct person will be in charge of making medical decisions on your behalf.

Not making changes to your will

It’s important to update your will so that it reflects who you want to receive your assets. If you currently have a will from before your second marriage, you can have a contract drawn up that keeps your surviving spouse from changing anything in your will. If you have a specific breakdown of who you want to receive certain sentimental family items, you may be able to add this to your will with a codicil or a letter of instruction.

Not giving anything to beneficiaries until you’re gone

When you want to leave behind money and other assets to your children, it might be more beneficial to give this to them before you pass on. You’re able to transfer up to the amount of $15,000 per individual and not have to pay a gift tax on it. Your spouse also can give this amount, and you can also give this to their spouse for a total of $60,000. You won’t have to deal with the IRS at all until you reach this limit.

Estate planning shouldn’t have to be a big hassle. Consider your beneficiaries, will and when you’ll give money and assets to your loved ones. Do your research and seek professional assistance to prepare for the future with these matters.