When two families come together, there’s a lot of love and some chaos. You have to learn new routines, new dynamics, and maybe fill out new paperwork. One of the most overlooked pieces of that puzzle is estate planning.
If you or your spouse has kids from a prior marriage, making sure everyone is protected takes a little extra thought. This is more than who gets what. You want to take this time to keep the peace, honor your promises, and make sure your legacy goes where you want it to.
Here is what you need to know about estate planning for blended families. This can help with protecting children from prior marriages.
What Happens If You Don’t Plan
If you pass away without a solid estate plan, Wisconsin’s inheritance laws take over. Unfortunately, they are not known for being sensitive to family dynamics. In many cases, your surviving spouse automatically inherits most of your estate.
This can happen even if you intended to split things between your spouse and children from a prior marriage. Without a clear plan, the people you love could end up hurt or at odds.
Finding the Balance
When you are in a blended family, estate planning is all about balance. You want your spouse to be secure, but you also want to make sure your children from a prior relationship receive their share as well. There are smart ways to make that happen.
Use a Trust Instead of Relying on a Will
A trust gives you control. For blended families, a common option is a Qualified Terminable Interest Property trust. This lets you provide for your spouse’s needs while guaranteeing that the remaining assets go to your children.
Keep Some Assets Separate
If you have property or investments from before your marriage, you might want to keep them separate. You can designate some to go directly to your children through a trust or beneficiary designation.
Double-Check Your Beneficiaries
Life insurance, retirement plans, and joint bank accounts will not follow your will. Many times, they go straight to whoever is listed as the beneficiary. If your ex’s name is still on the paperwork, they could legally inherit those funds. Take a few minutes to update those designations every few years or after major life changes.
Use Life Insurance
Life insurance can be a great way to provide for one side of the family without taking away from the other. For example, your spouse might receive the life insurance proceeds while your kids inherit your property or savings.
Consider a Prenuptial or Postnuptial Agreement
These agreements can save a lot of heartache later by spelling out exactly what belongs to whom and what will happen if one spouse passes away.
Consider Incapacity Planning
Estate planning is not about what happens when you are gone. It is also about what happens if you are alive but cannot make decisions for yourself. Durable powers of attorney and healthcare directives make sure the right person can step in to help. These designated individuals can be your spouse, one of your children, or someone else.
Keep Everything Updated
As you know, families change, and so should your plan. You want to review your documents every few years or after big life events like:
- A marriage
- A divorce
- A new grandchild
- A new home
- A financial windfall
Remember what felt “fair” ten years ago may not make sense today.
Get Help from Someone Who Knows This Area
Blended-family estate planning is not something you want to DIY with an online template. Wisconsin laws are complicated, and a small mistake can have big consequences. With help from an experienced Wisconsin estate planning attorney, you can structure things in a way that keeps everyone protected and keeps the peace long after you are gone.
We Can Help with Your Blended Family Estate Plans
Estate planning for blended families can get complicated fast. However, with a well-thought-out plan, you can protect your children from prior marriages and make sure they get their fair share. This is about leaving behind clarity, security, and a little harmony after you have left.
If you are looking for help with your estate plan, Collins Law Firm can help. We have experience helping all families create plans to protect the interests of everyone involved. Schedule a consultation today.