Many first marriages end in divorce today.Over half of those who divorced from their first spouse will remarry.A large number of blended families have special estate planning needs.Estate planning can be done to address your family's special needs if this situation describes you.You can come up with a plan if you follow simple steps.
Step 1: Get tax savings.
Good estate planning requires you to have a specific goal and priorities.You can use this to develop the best plan for your situation.Certain tax savings can be brought about by estate planning.You can save money on taxes.This can motivate you to take the time to plan your estate.If you want to save on estate taxes, you may consider opening a trust.Many trusts offer tax savings as well as some kind of control over the money after your death.
Step 2: Provide for your children.
It's important to protect the future of your children with blended families.Adding in more children from your spouse makes this more complicated.You may want to provide for your step children as well as any children that you and your new spouse have together.Ensuring that at least a portion of your estate passes to your children rather than your spouse may require a little planning and should be taken into consideration as you start the planning process.
Step 3: Provisions should be made for your spouse.
Ensuring that a second or third spouse is taken care of is a common goal of estate planning.If you want to make sure that your spouse gets a piece of your estate, you will have to consider this.If you don't have a Will, all of your estate goes to your spouse.It usually gets divided between the spouse and domestic partner and the children of the deceased.Each state has its own laws.
Step 4: Consider your former spouse.
It is possible to provide for an ex-spouse in your estate plan.Depending on the length of the marriage and the relationship you still have with your ex- spouse.Clear provisions are required in your estate plan if you want to provide for your ex- spouse.
Step 5: Make sure beneficiaries are protected.
You can set up a trust if you want to leave money for certain people in your life.A number of trusts can be set up to make sure your money is spent the way you want it to be spent.If it is a large sum, this prevents them from mismanaging it.A trust can allow you to say that your adult children only receive inheritance funds for educational purposes.Only after they reach a certain age can the funds be made available.
Step 6: Understand the realities.
If you remarry, you won't want to include your ex- spouse in your estate plans.Many people leave their property to their exes because their wills weren't updated.This can be hard on your family.If you don't change the beneficiary of your policies to your new spouse or child, your ex-spouse will get the proceeds.In rare cases, the court may order a spouse to keep the policy intact if it's a joint policy or if one spouse has a minor child.Whoever is the policy holder can change the beneficiaries.
Step 7: You should change your beneficiaries.
When you remarry, you need to revisit each relevant policy that has a beneficiary and change it to either your new spouse or another family member.To make sure that your ex- spouse is no longer listed as the beneficiary, you should check all of your accounts and vehicle titles.Life insurance policies, retirement accounts, savings and checking account, annuities, stocks, and savings bonds are some of the accounts.Some divorce decrees impose rules on maintaining life insurance policies for ex-spouses and children as part of alimony or child support.You should comply with the court order if this applies to you.If you want to meet the needs of your family, you might consider getting a new policy all together, instead of just changing the beneficiary.When you first obtained your policy, you may have different needs.Everyone should be provided for how you want them to be.
Step 8: Re-title or close joint accounts.
You need to close or re-title joint accounts after you remarry.This is necessary because when a joint account owner dies, the account automatically passes to the surviving joint owner.Close all of your joint accounts during the divorce to prevent your spouse from getting these assets.Sarah and Joe just got married, which is their second marriage.Brad is listed as the joint owner of Sarah's investment account.If Sarah designates Joe as the sole beneficiary of her estate in her Will, the account owned by her and Brad will pass to Brad when she dies.
Step 9: Reciprocity wills can be executed.
If you and your new spouse will execute Wills, you need to make a decision.A reciprocal will is a document written by a husband and wife.Each Will leaves the assets to the same person or people.It will be easier to understand when someone dies.Sarah and Joe are married to each other.They have a child from a previous marriage.If one of them dies, half of the estate goes to Sarah and the other half to Joe's child.When executing reciprocal wills, your spouse can change his Will at any time.Joe will inherit the entire estate if Sarah dies.He could change his Will to disinherit Sarah's child and leave the entire estate to his child.
Step 10: Non-Reciprocal Wills can be mediate.
When executing Non-Reciprocal Wills, you need to determine what your assets are for each of you.There is no confusion about what property each party can leave to their heirs.Changes made to his Will are not required to be reported to you.Your spouse is free to change his will at any time, and he is not obliged to inform you of the change.He may remove your children as beneficiaries and leave his entire estate to his own children without your knowledge.If you have trouble reaching an agreement about ownership of your property, a pre-nuptial agreement or your state's marital property laws may dictate ownership for you.
Step 11: Who will inherit the assets?
When planning your estate, you have to decide which of your assets to leave.You can either leave everything to your current spouse or you can divide your assets between your spouse and children.There are many ways to distribute your property after your death.Depending on your circumstances, the state where you live, and the size of your estate are some of the factors that can affect these.If you want to find the best option for your family, you need to consult with an attorney.
Step 12: You can choose a personal representative.
You need to find a personal representative once you have decided who will inherit your estate.Your personal representative will make sure that your Will is followed and your estate is handled according to your wishes.She will be responsible for collecting assets, obtaining property appraisals, opening an estate account, paying estate bills, and keeping records for the estate heirs and the Court.When choosing a representative for your estate, there are many considerations you need to take into account.A non- family member is not associated with either side of your blended family.She will not be partial to one side of the family if there are any issues with your estate.You have the option of choosing a friend or professional.This can be an asset manager at the bank.These individuals may be a good choice of personal representative for some families because they are knowledgeable about money and have no stake in family affairs.
Step 13: Take care of your official documents.
It is time to execute the official documents once you have finished planning your estate.The documentation of your estate plan can include a Will, a power of attorney, and a Living Will.A Last Will and Testament is a legal document which specifies who will inherit what portion of an estate upon the testator's death.The person who executes the Will is the testator.A power of attorney is a legal document which gives another party the authority to act on your behalf in financial or health care matters when you are not able.Should you need this type of care, you should have a Living Will, a document which directs your family and doctors about your wishes regarding remaining alive on machines and receiving nutrition and hydration.