When a couple is in the throes of planning a wedding, the thought of discussing their wishes for how they want assets distributed after one of them dies may be far from their minds. However, this may be a very important time to have this conversation and may be especially important for remarrying couples.
When two people come together with children from prior marriages, many things can be more complex than if they were entering into a first marriage. Estate planning is one of those things.
Supporting a spouse and children
When thinking about estate planning, it is understandable that most people want to leave a legacy for their children. At the same time, it makes sense that each spouse would want to make sure their partner is cared for appropriately after their death. As CNBC explains, in the absence of a solid estate plan, a remarried spouse may inadvertently overlook the needs of one of these parties.
If a person’s entire estate flows to their surviving spouse with no plan dictating anything specific for the deceased person’s children, there may be no way to ensure that the children will receive anything. If the surviving spouse remarries and comingles assets with a new spouse, the matter can become even more complicated.
QTIP trusts may help
According to PolicyGenius, some blended families find that creating a qualified terminable interest property trust gives them both the flexibility and the structure that they need in an estate plan. One person’s assets may be put into the trust and designated ultimately for their children. However, upon that person’s death, the surviving spouse gains the ability to earn an income from those assets. Upon that person’s deaths, the assets then flow to the children.