Estate planning is important, but not many people realize the value of making these plans until it is too late. This often leaves loved ones with the frustration and confusion of probate without the guidance of a will or other document. You may be among those who have created an estate plan. Even if it is just a simple will, you have taken a bold step to protect your family.
However, if you have experienced major changes in your family since the execution of your will, your family may still be at risk of facing your death with overwhelming confusion. This is because your outdated plan may omit those people who are new in your life, including your new spouse and stepchildren. It may also be inadequate for the protection of your biological children.
Amending your plans
North Carolina inheritance laws direct the distribution of your estate if you have no will or if your will is void because of your divorce. Understanding the implications of the laws and how they affect your situation will be important as you consider the adjustments you must make to your plan. Perhaps just as important is an understanding of your spouse’s plans and goals and how they compare with yours.
Open communication about estate planning is crucial when families blend. You and your spouse may have disproportionate wealth, but you may also have strong and differing opinions about how to include – or exclude – your stepchildren from your estate plan. Ironing out these differences and reaching common goals is essential.
Options for covering all the bases
If you now have stepchildren in your life, you may need more than a will to convey your wishes. Presumably, you made sure to update your designated beneficiaries on your insurance policies and other accounts after your remarriage. Remember, however, that if you name only your spouse as a beneficiary, your spouse can legally bypass your children in sharing the assets. This may be the case for several kinds of assets, such as the home that you own jointly with your spouse.
To ensure your estate includes all those whom you intend to include, you may consider any of the following estate planning tools:
- An instruction letter in your will
- Separate trusts for your new family and your biological children
- A credit shelter trust
- An irrevocable life insurance trust
An estate planning attorney with experience assisting blending families in preparing their documents can provide you with any additional alternatives for providing a solid plan for your family. Such an advocate can also help you understand the tax ramifications as they relate to North Carolina law.