Dividing Insurance Policies, Retirement Accounts When You Have a Blended Family
According to the Pew Research Center, about 40 percent of all marriages in the United States in 2013 included at least one spouse who had been married before. And in many cases, one or both spouses entering into a marriage have children from previous relationships, resulting in an increasingly common situation known as a “blended family.”
These situations can make estate planning more complex, because it can be difficult to create a plan that’s fair to both children and stepchildren.
Pay close attention to designations
One common oversight people make when planning their estates is forgetting to change the beneficiary designations on their insurance policies and retirement accounts when their situations change. They may stipulate who assumes the assets contained in those accounts in a will or trust, but if they do not actually change the designation — such as after a divorce or remarriage — a former spouse or a previously named designee could receive them.
Furthermore, if you wish to distribute your assets to several different individuals upon your passing, you must list them as primary beneficiaries on your insurance policies and retirement accounts. If you name only your spouse as your primary beneficiary and all others as contingency beneficiaries, for example, only your spouse would receive those assets. That person could then do what he or she wishes with them, with your other beneficiaries potentially receiving nothing.
To learn more about your options when dividing your assets and property when you have a blended family or multiple beneficiaries, meet with a skilled Pittsburgh estate planning attorney at Feldstein Grinberg Lang & McKee, P.C.