Estate planning considerations for blended families

On Behalf of | Nov 4, 2022 | Estate Planning

Creating an estate plan if you have a step-family in Hawaii can be quite a challenge. Not only are you supposed to be careful with your financial decisions and their tax implications, but also the emotional issues surrounding your every move.

Consider the types of relationships in your family

A blended family is more like a merger; you have your kids and a life you’ve already established, and your spouse also is in a similar circumstance. The kind of bond that your spouse may have with your children or that you may have with theirs may not be as strong as you may wish. Meaning your kids and your spouse can become complete strangers if you were to die before their bond solidifies.

Taking that into consideration, your spouse could disinherit your children or give them less than what they would have if you had died intestate. If this is something that concerns you, then you’ll want to take some time to discuss estate planning with your spouse and come to an agreement about how you want your assets divided in the event of your death.

Update your beneficiary designations

If you have a will, your executor will distribute your assets in accordance with that document. However, there are some assets that pass outside of probate and are not controlled by your will. These include retirement accounts, life insurance policies and annuities.

For these types of accounts, you’ll need to designate a beneficiary. And if you’ve been married before, it’s important to update your beneficiary designations to reflect your current family situation. If you don’t, your ex-partner could receive your life insurance payout or retirement account funds instead of your current spouse or children.

Make sure your estate planning documents are up to date

If you already have an estate plan in place, you’ll want to review it periodically to ensure that it still reflects your wishes. This is especially important after a major life event, such as getting married, having a child or buying a new home.

Planning for the future of your loved ones is one of the best gifts you can give them. This is not a task you should put off; the future is often so uncertain. It’s better to have a plan that you keep updating with time than to die and leave the probate judge to make all the decisions for you.