Estate planning gets more complicated for people in blended families. Navigating complex relationships and the death of a spouse can create complicated financial and emotional issues. We can help.

More than half of all Americans have either been or will be included in a blended family during their lifetime. A blended family is a family unit where one or both parents have children from a previous relationship. It can be hard to navigate the complexities of these different relationships and the death of a spouse can create even more complicated financial and emotional issues. The key to minimizing stress on any family members and heirs is a well thought out estate plan that makes it possible to honor your spouse and provide an inheritance that is protected for your own children.

PLANNING DISCUSSIONS WITH A BLENDED FAMILY. Not only are the financial issues for blended families more complex, but the emotions around those decisions can be even more intensified. Especially when you are dealing with the competing interests from your own children, stepchildren, and a new spouse. Participating in family conversations early and often can better prepare everyone for what may come in the future.

THREE STEPS TO CONSIDER IN THE PLANNING PROCESS.

(1) Have a discussion with all the members of your family on topics such as guardianship, long-term goals, finances, and other contractual obligations.

(2) Compile a list of individuals you want to be named in your documents including individuals to serve as agents during your incapacity or upon your death and individuals to whom you wish to give your assets and possessions.

(3) Consider the intended amount you want each party to receive, taking into account the financial needs of surviving spouses, young children, and other dependents.

NEXT STEPS IN THE ENGAGEMENT PROCESS. Once you have a basic overview of your goals, engaging in a collaborative discussion with your financial planner and estate planning attorney will help guide your decisions. Here are a few common topics that may arise when you are having these conversations:

* Setting up a Trust. One way to avoid disinheritance is by placing some or all of your assets and property in a Trust. Establishing a Trust will allow you to provide for your spouse during their lifetime, and when your spouse dies, anything documented in the Trust will be distributed to the children accordingly.

* Trustee Selections. Choosing a Trustee to manage your estate is a very important decision. Your Trustee will oversee your assets in the event you become incapacitated. Upon your death, they are responsible for ensuring that the remaining assets are passed to your loved ones as directed. Most often a family member, friend, or a professional such as a lawyer or accountant is chosen for this role. The person you consider should be trustworthy, financially capable, and one who will understand your family’s dynamics. It is important to consider how Trust beneficiaries will respond to the designated Trustee, and how all parties may interact together, especially during an emotional time.

* Living Wills and Powers of Attorney. Any complete estate plan will incorporate a Living will, Healthcare Power of Attorney, and Durable Power of Attorney. A Living Will is a document detailing your medical wishes should you become incapacitated. A Healthcare Power of Attorney designates someone to make medical decisions on your behalf if you are unable to do so. A Durable Power of Attorney appoints someone to handle your financial affairs when you no longer can. Individuals will often name their spouse, but in blended families it can become more complicated. Whether your family is blended or not, it is important to choose someone who is trustworthy and will provide an unbiased approach when dealing with family members.

* Home Ownership. If you own your home as "joint tenants with rights of survivorship" with your spouse, upon either spouse's passing, the full value of the home would transfer to the surviving spouse. If you own your home individually, upon your death, it would transfer as directed in your estate planning documents. If you do not have an estate plan it would be passed according to your state's laws of intestate succession. If you have concerns about disinheritance after your passing, you can also consider establishing a Qualified Personal Residence Trust (a "QPRT"). A QPRT allows the surviving spouse to live in the home during their lifetime, but upon their death, the home would be distributed to the beneficiaries of the Trust.

* Tangible Property. In addition to the financial components of an estate, there are sentimental items that may have little to no monetary value, but can often cause the most contention among family members. It is important not to overlook these items in your planning. If certain possessions are jointly owned with your spouse, and you have children from different marriages, it is important to designate who would be the recipient of these possessions in your estate plan.

ESTATE PLANNING STRATEGIES TO PROTECT YOUR FAMILY AND ASSETS. As family dynamics become more complex, so do the intricacies of creating an estate plan. Depending on a family’s individual needs there are different strategies that can be used to create a successful plan. If you and your family have questions about creating or revising an estate plan, give us a call at 253.858.5434 to set up an appointment today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.