It is always a good idea to communicate your wishes in the event of your death or incapacitation by creating an estate plan. However, it becomes even more important when you are part of an extended family, i.e., you or your spouse has children from a previous relationship.
You do not want to disenfranchise your children but at the same time, you have a responsibility to provide for your current spouse. Fortunately, with some careful planning and consideration, it is possible to do both.
Check beneficiary designations
Following your divorce, you should check the beneficiary designations on your retirement plans and life insurance policies. Make sure that they are up to date and consistent with the terms of your divorce agreement.
Update estate planning documents
If you initially made your estate plan during your first marriage, you may have named your ex-spouse as the power of attorney, health care proxy or executor of your will. Fortunately, you can update these at any time, and now that you have remarried, you should make sure that these reflect your current situation if you have not already. Be sure that you explicitly mention your children from your previous relationship. They may not stand to inherit otherwise.
Consider a trust
Creating a trust, such as a qualified terminable interest property trust, allows you to leave an inheritance to your children while still providing for your surviving spouse. Your spouse is the sole beneficiary of your QTIP trust as long as he or she is still alive. The assets then pass to your children, or whomever else you name as beneficiaries, after your spouse’s death.
Following your death, conflicts may arise among different branches of your family tree. Expressing your wishes beforehand may help keep these under control.
