Even though 90% of American adults view estate planning as an important topic, most of us aren't being proactive about this issue in our own personal lives. Studies show that only 33% of American parents have had detailed discussions about estate planning with their adult children. Even though we recognize that it's important, most of us hate to think about the mortality of a loved one.
Estate planning is essential in blended family scenarios. If you have children from multiple marriages, everyone needs to be on the same page about the transfer of wealth from one generation to the next. Failing to discuss these issues in a timely fashion can lead to hostility and resentment that could continue for generations, which is precisely what most parents in a blended family spend their lives working to avoid.
Hypothetically, experts will say it's best to treat all children equally in your will. However, there are often very valid reasons for differences in treatment, such as a significant difference in the ages of children from a first and second marriage. If you decide to divide assets in a way that might be misconstrued by your heirs, it's smart to leave a legacy letter with your will that explains your reasoning. A legacy letter is not a legal document, but it can provide a valuable sense of emotional closure for your family during a difficult time in their lives.
Assets that have a listed beneficiary, such as life insurance policies, employer retirement plans, investment accounts, and IRAs, aren't controlled by a will or trust. You will need to choose a beneficiary for these assets. The beneficiary can't be a minor child, so you will need to select someone you trust to look out for the best interests of your children if you intend for the proceeds from these assets to provide for their care.
Power of attorney should be considered along with other estate planning issues. The person you choose to have financial power of attorney will be able to buy and sell real estate, open and close financial accounts on your behalf, and collect any government benefits that you may be entitled to receive. Health care power of attorney gives someone the legal right to make decisions about your medical care if you are unable to make these decisions on your own. You don't have to choose the same person for both of these duties.
How Can We Help?
If you need assistance with estate planning issues after your divorce, please call our office at (626) 683-8113 or email us at info@PasadenaLawOffice.com to speak to one of our Pasadena family law attorneys.