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Families come in all shapes and sizes. Individuals and couples need more than one-size-fits-all estate plans to meet their needs and goals. They need estate plans that meet their specific needs and wishes. Trusts are the perfect estate planning tool for customizing estate plans for blended families and complex situations. This blog discusses estate planning for blended families in New Brunswick and Staten Island.
Choosing the Best Trust for Your Blended Family
There are many types of trusts you can use when estate planning for blended families. The trust you choose depends on several factors, including:
- Long-Term Goals – What are your goals for long-term asset distribution and financial stability? Do you need to manage a family business or provide for a child with special needs? Carefully consider the long-term impact of various trusts to align the trust with your intended outcomes.
- Financial Goals – Each family has different financial needs and goals. For example, do you want to provide for a surviving spouse or preserve wealth for future generations? Are you interested in minimizing taxes and asset protection? Your financial goals help determine the type of trust you need for a blended family.
- Family Members – Consider the relationships between stepparents, stepchildren, half-siblings, and stepsiblings. How will the terms of a trust impact their relationship? Also, consider each family member’s needs when determining whether your trust and estate plan is fair and equitable.
Designing an estate plan for a blended family requires parents to have open and clear communication. Most parents leave their estate to each other and then to their children. However, a simple will may not be sufficient for a blended family. Trusts allow parents to separate assets and customize inheritances to ensure each child receives a fair inheritance regardless of which spouse dies first.
Customizing a Trust for Blended Family Estate Planning in New Jersey and New York
A common concern for blended families during estate planning is providing for a surviving spouse while protecting children from a previous relationship. Several options exist that can address this concern. Marital trusts, including QTIP and Bypass trusts, can provide income for a surviving spouse during their lifetime while leaving the principal assets to the grantor’s children.
Spouses may create a trust tailored to ensure that each child is treated fairly. Because the assets are held by a trust instead of passing through an estate, it would not matter which parent dies first. The trust dictates how and when assets are distributed instead of a parent’s will.
However, equal and equitable are not always the same. An equitable share of the estate is a “fair” portion given a family member’s specific needs and circumstances. Equitable may not necessarily mean an equal share. For example, parents may need to leave a larger share of the estate to a child with special needs. A Special Needs Trust can accomplish the goal of protecting a child with special needs, while another trust provides for siblings.
Estate planning for blended families must balance the diverse interests of all family members, including surviving spouses, biological children, and stepchildren. Trust agreements can help parents accomplish this goal.
Learn More During a Consultation With Our New Jersey Trust Lawyers
Trusts offer flexibility for estate planning. It allows you to customize an estate plan to address complex situations. Contact Merlino & Gonzalez to discuss your situation with our Staten Island and New Brunswick estate planning attorneys.