Mixed Families; What to do if Your Spouse is not the Parent of All Your Children
Written by Christopher J. Berry, Esq. on August 12, 2008 – 7:03 pm -
In this day in age of increased divorce rates and multiple marriages in Michigan, it is not uncommon for there to be a situation for a married person to have descendants from prior marriages. Often, this can cause conflicts after your death unless your spouse has adopted your children while they are young.
The problem arises because you have a decision to make, leave assets to the spouse and possibly disinherit your children (what’s stopping your spouse from remarrying after your passing and freezing out your children?). Or leave your spouse high and dry in favor of your children.
Through a trust based estate plan it is possible to plan for the spouse while still protecting the inheritance of the children. This can be done by creating trust that in essence “locks up” a portion of the assets for the benefit of the spouse while living, then to the children. But the spouse does not retain full control of the assets in this “family” or “locked up” trust. An important consideration is who you appoint trustee of any trust where there is provisions that “lock up” any of the assets.
Alternatively, separate assets can be used to fund each of the goals. For example, life insurance could be purchased and put into an irrevocable life insurance trust (ILIT) to ensure that beneficiaries use the portion alloted to them properly, by your own terms.
Regardless, the most important take away is that with multiple marriages, it is important to take these factors into consideration and visit an estate planning attorney for counsel.
Posted in Estate Planning, Living Trusts |
