Trusts to Protect Blended Families
When members of a couple have children from prior relationships, family matters can get complex on many levels. One aspect that is often overlooked is estate planning.
Without the right planning, children can be unintentionally cut off or disconnected from family property. This can lead to uncomfortable relationships and animosity among family members, sometimes creating rifts that never heal.
The team at Peach State Wills & Trusts understands the importance of preserving family relationships and family property. We can prepare a trust to establish and protect expectations for family members.
Trusts can be set up in a variety of ways. For protecting blended families, estate planning attorneys often recommend a revocable trust that can be easily changed if necessary and that allows you to continue to control property during your lifetime.
Irrevocable trusts can serve a variety of purposes such as tax planning and meeting long-term care needs, but the terms cannot be changed in most cases, property that is transferred into an irrevocable trust cannot be used by the family member who created the trust.
How the Trust Would Operate
Trusts are estate planning tools that are set up to own property. A revocable trust is often referred to as a “living” trust because it takes effect during the creator's lifetime and the creator of the trust can change it.
In a standard trust arrangement, the creator (often called the grantor) transfers property such as real estate into the trust. Property is the trust is then managed by a trustee for the good of beneficiaries. A trust may be set up by a parent, for instance, to hold property for minor children, and an attorney or financial advisor might serve as trustee to manage the property and provide funds for the children's use as needed.
In a revocable living trust, the creator also usually serves as their own trustee and beneficiary, although they would also designate alternate trustees and alternate beneficiaries to take over when the creator passes away. When the creator of the trust is also the beneficiary and the trustee, they can use and manage their property for their own benefit, just as they did before it was transferred into the trust.
The key advantage of the trust becomes apparent when the creator passes away. Then the property passes directly to the alternate beneficiaries without going through probate.
Protection for Blended Families
People often opt for simplicity in estate planning arrangements. Spouses prepare wills leaving everything to each other. But problems can arise when one spouse dies and the other remarries. Property can pass to a new family without providing for children from earlier relationships.
With a living trust, you can establish property rights for children or other family members so that when you pass away, their interests will be protected no matter what happens in the future. Knowing that family property arrangements are established and preserved can prevent problems within the family in the short and long term.
Work with the Team at Peach State Wills & Trusts to Develop the Best Plan for Your Family
Every family situation is unique, and that means you should have a plan crafted with your specific needs in mind. A revocable living trust can be set up to include the terms you want, and it can be changed if your situation or objectives change.
While trusts often work best for blended families, your situation may be better served by other strategies and tools. We would be happy to meet with you, get to know your goals, and develop the right plan to reach those goals. Contact us today to get started.