We often talk in estate planning circles about preparing your assets for distribution to your loved ones. Depending on your personal wishes and the size and scope of your estate, in most cases this is going to refer in large part to your children and grandchildren. However, we live in an era when the typical family is not necessarily comprised of a single patriarch and matriarch. These days more than 4 out of every 10 marriages ultimately terminate in divorce. Divorce itself creates the need for an estate plan update, but the reality is that most of the people who get divorced eventually remarry.
The majority of these people have children from their previous marriages, which results in what are called blended families. If you are in this situation, there is a lot more to consider from an estate planning perspective. Depending on the dynamic that exists between the people who are getting married a number of different courses of action may be appropriate.
The thing that most people are concerned with more than anything else is making sure that their children from their previous marriages are provided for. For this reason and others, many people who are bringing considerable assets into such a marriage have the desire to separate their personal property from the community property that will result from the marriage. This can be accomplished through the execution of a pre-marital agreement, and some people will choose to create trusts in an effort to protect assets.
The QTIP or Qualified Terminable Interest Property Trust is one type of trust that is often used in these cases. These trusts provide the surviving spouse with income for the rest of his or her life. But, the grantor of the trust names the beneficiary or beneficiaries who will assume ownership of the assets after the death of the surviving spouse. This would presumably be his or her children.
Estate planning for blended families can be somewhat complicated, but there is an efficient solution for every possible scenario. It is just a matter retaining an estate planning attorney who is experienced and savvy when it comes to blended family planning.