In this Elder Law Minute, Paige Fox explains key estate planning strategies for blended families to ensure wishes are honored and assets protected.
Hi, my name is Paige Fox. I’m a senior associate attorney here at Dent Coulson Elder Law. And I understand these topics are very complex. So, I’m hoping these Elder Law Minutes can bring some insight and some more understanding to both potential clients and current clients. Thank you.
Today, we’re here to talk about estate planning, particularly the importance of estate planning for blended families. More and more these days you see situations where it’s a second marriage and there’s children from prior marriages or grandchildren, etc. And these spouses, while they are concerned about providing for each other, they are also concerned about making sure to provide for their family members after they pass away.
So, there’s quite a few ways that you can handle this. And again, you know, the wonderful thing about living trusts is that it provides a lot of flexibility. And, for example, one example that we use is the ability for a spouse to modify their living trust after the first spouse passes away. So, this is a decision that can be made while doing estate planning to decide whether or not after the first spouse dies if you want your trust to become irrevocable, meaning that the surviving spouse cannot amend or restate that trust or the terms in that trust.
Another way that we can handle blended families and making sure that your assets are distributed after you pass away and follow your wishes would be to do individual living trusts for each spouse where you separate your assets into each living trust depending, you know, on how assets are held. And then you’re both co-trustees of that trust during your lifetime. But after the first spouse passes away, their living trust becomes irrevocable, and therefore, the surviving spouse can only modify the terms of their living trust.
That allows for, again, not only the ability to provide protection and assets to your surviving spouse, but it also gives you the opportunity to then distribute money to children from a prior marriage, grandchildren, etc. Another way that this can be done is via IRAs and retirement accounts and named beneficiaries, which would be if you leave them outside of the trust. You can always name different individuals in different capacities to make sure that you leave money to different individuals that you wish to leave it to after your death but also being able to provide for your surviving spouse.
It’s also important to make sure that your living trust documents have powers, rules, and regulations in them and authorities to allow your trustee or whoever you name to assist you to be able to do Medicaid planning or asset protection in the event that one spouse needs long-term care. And rather than spending all of your money down and then getting on Medicaid, it allows the community spouse to do asset preservation so that we can make sure to set some money aside for the benefit of the surviving spouse while also getting the institutionalized spouse on Medicaid.
So again, there are lots of different concerns that come up with aging, but also particularly with blended families. And so just know that while I’ve just touched on a few today, there are various types of flexible terms and language that we can include in a living trust to make sure that your wishes follow exactly what your desires are after you pass away and also during your lifetime. That said, I recommend getting your estate plan updated today. Give us a call at Dent Coulson Elder Law.
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Dent-Coulson Elder Law is dedicated to providing families in the St. Louis area with their Elder Law needs. Our practice areas include Asset Preservation Planning, Veterans Benefits, Medicaid Eligibility, Alzheimer’s Planning, Special Needs Planning, Estate Planning and more. We understand the financial challenges you may face as you and your loved ones grow older. At Dent-Coulson Elder Law, our clients’ well-being is our number one priority. For immediate help, call (618) 632-7000 (IL) or (314) 567-9292 (MO), or Contact Us and we will get in touch as soon as possible.
