Estate Planning

Estate Planning for Blended Family in Arizona

Estate Planning for Blended Families in Arizona - Why is It Important?

Estate Planning for Blended Family in Arizona - Why Is It Important?

Are you wondering if estate planning really matters? Check out this guide to find out why estate planning is important for a blended family in Arizona.

With 40% of married couples with children being step-couples, parents or guardians from these families should start looking into estate planning. However, there is little information on making estate plans involving a blended family.

In blended families, one or each of the guardians or parents has kids who are unrelated to the other parent. But if one spouse or both spouses pass away, an estate plan can help designate the beneficiaries. Set up your beneficiary planner free consultation today!

Estate planning helps protect the surviving family members as per the wishes of a deceased loved one. It also has the following benefits for blended families:

Spells Out What Belongs to Whom

The goal of preparing an estate plan for blended families is to have a clear vision for the inheritance of your estate. Without one, your spouse, children and stepchildren may not know the real beneficiaries.

Under Arizona estate law, property owned by married couples qualifies as community property. In this case, each spouse can have a claim for it.

But if one of the spouses acquires the property outside marriage, it will not qualify as community property. Children from a previous marriage may also be entitled to the property if you die without a will under Arizona law.

Estate planning can help both spouses decide the allocation of the assets. It can set titles and distribution protocols after the demise of one of the spouses when blended families are involved.

Arizona's intestacy rules allow a deceased person's children to share their assets equally. The rule would come into play if the deceased didn't leave a will.

Stepchildren can't claim the estate if the deceased didn't mention them as beneficiaries. The law doesn't consider them as heirs or next of kin.

Plan for the Expected and Unexpected

Blended family estate planning can make your life easier in the future during retirement. As you sort out your finances, you can tap into good retirement programs to sustain your lifestyle when you retire.

Making these kinds of future plans can give you peace of mind and prepare you for any financial disasters.

Estate planning goes beyond planning for your loved one's future after your demise. It also involves planning for a disability, a former spouse, biological children (your own children from previous relationships) and even other family members. This way, the estate plan can guide your loved ones in maintaining your remaining assets and caring for you when incapacitated.

You may plan for a health or an accident-related disability or incapacitation. In your will, you need to assign a trustworthy person the job of managing your wealth. You may also have someone handle your financial issues or healthcare decisions.

Comes with Several Options

When you create or revise your plan, you need to look into your relationship with each beneficiary. You should also customize it to fit your loved ones whom you may want to inherit the estate.

Luckily, with this form of legal planning, you have several options that you can use to fit your blended family. Each option will ensure that the will is fair, the executor is trustworthy, and the inheritance sizes are favorable.

You may consider a family trust that will hold out assets in the event of death. Family trusts allow surviving spouses to decide on the distribution of the assets. They can also split your wealth to make sure your surviving spouse gets a percentage of it and your biological children get their share as well. Blended families require more planning than usual.

With a marital trust, you get to pass your estate to your spouse and spare a portion of it for the children. Your spouse can also automatically get the estate through an outright ownership agreement. It will keep you out of probate court if properly set up and funded.

Helps Determine the Kind of Children to Include in the Will

While you may consider your stepchildren as your real children, Arizona estate laws categorize them differently. As such, stepchildren can't inherit your estate if you fail to prepare a will or a living trust. So, as you create a plan, figure out whether you should include your spouse's children.

You can leave them out of the will for personal reasons. For instance, if they are estranged, you may have a valid reason not to list them as beneficiaries.

Either way, inform your estate planning attorney about your decision for further legal guidance. You should work with your spouse to avoid having the Will contested, which may bring you to probate court.

A Great Way to Designate the Role of the Surviving Spouse

Depending on how each spouse accumulated their wealth, both of them can have separate trusts. They will always have separate wills. You can list yours in favor of your spouse or choose to leave them out. If you don't decide earlier, the state will automatically transfer the assets to your spouse.

In the will, specify your spouse's role before you pass away. You can also set limitations on their responsibilities. Your surviving spouse and your surviving spouse's children may or may not be a part of your estate. You may also want to include your deceased spouse's children if they passed away before you. An estate planner can help you find the best way to execute your wishes.

Suits the Growing Needs of a Blended Family

If you remarry, you have to update your estate plan to reflect your current marital status. Ensure that it designates the roles of your new spouses and lists other beneficiaries. You will want to include children from prior relationships, specially if they are minor children.

Discuss with your ex-spouse any joint deeds, titles or accounts you had together. You can agree on splitting them or listing new beneficiaries.

Ensure that your will covers the needs of your current blended family. If your new partner has children from a previous relationship or marriage, you can choose to or not to list them as beneficiaries.

Speeds up Asset Distribution and Reduces Estate Expenses

A well-written estate plan can prevent conflicts and delays in asset distribution. It ensures that your beneficiaries inherit your estate as you wish.

But if you fail to prepare a will, your entire property will go through the Arizona probate system. The state may take a long time to release the assets to your family. A probate is not only time consuming, it is also more expensive.

Without an estate plan, your loved ones will incur court costs and legal fees when pursuing your assets. These costs can reduce the value of the assets if the court case is delayed.

Lastly, estate planning can lower tax liabilities on your wealth. Once your loved ones inherit the estate, they may qualify for tax reduction programs for inherited assets.

Need an Estate Planning Attorney?

As the needs of your blended family grow, you should prepare design a strategy to reflect these changes. The plan can help you make informed and proactive decisions regarding your estate's future. It also protects your beneficiaries as per your wishes.

If you are looking for an estate planning attorney in Chandler, Arizona, Citadel Law Firm is here to help. Our firm can help coordinate your estate plan, investments, long-term care and life insurance. Visit our contact us page today to book a free consultation, or click here to schedule.