Blended families have become the norm in America. While blending families may be the norm these days it doesn’t mean that they blend easily. Often, it takes a significant amount of work and patience to create a harmonious blended family. Along with all of the work it takes to make your new family work, be sure that you also make changes to your estate plan that reflect your new blended family.
For starters, review all of your old life insurance policies, retirement accounts and financial accounts to be sure that your previous spouse is not still listed as a beneficiary. If, however, you have an ongoing obligation to maintain a life insurance policy as a condition of your divorce decree, be sure that you do not change that policy.
Review and update your Last Will and Testament. Do not, however, make the mistake of creating another “winner take all” Will that leaves everything to your spouse. While this worked when you were married to the parent of your children, your new spouse is not their parent. If you leave everything to your new spouse then your children are depending on him or her to leave them assets upon death. Instead, consider splitting your estate assets between your new spouse and children, or creating a trust to provide for your new spouse but retain the assets for your children.
Consider long-term care issues that may require Medicaid planning. Even if you and your new spouse have signed a prenuptial agreement that states you are both responsible for your own long-term care expenses, the Medicaid program will not honor that agreement. Therefore, to protect your spouse’s assets you may need a Medicaid plan.