5 estate planning steps for blended families

5 estate planning steps for blended families

Avoid complications with these tips

by

Blended families are the new normal. At least, that’s been the case since the 2011 Canadian census was released, which found that 12.6% of all families in the country are blended. Adjusting to step-family life can be a handful in the day-to-day (think Cheaper by the Dozen, although maybe with fewer kids) but things get even more complicated when it comes to financial matters and estate planning post-union.

If you’re going to be heading a step-family of your own, there are five important ways to make the transition easier, financially, as Advisor reports.

1. Update your documents

In some provinces, a marriage could invalidate a previous will, so it’s important to re-assess and update any estate-planning you may have done prior to remarrying. Also, make sure to update any beneficiaries you may have assigned, otherwise you could unintentionally leave your RRSP savings to an ex-spouse.

2. Choose an executor

Who do you pick to carry out the terms of your will? Your spouse, children from your previous relationship, your current relationship or a combination of all three? Avoid the confusion and awkwardness by designating a third-party like a lawyer or accountant.

3. Establish a trust

If you have specific parts of your estate you wish to pass on to children of a previous marriage, while still providing for your current spouse, a trust will ensure the correct division of assets.

4. Consider getting life insurance

The money from a policy would be available after death, adding to your estate. You could, for example, assign children from a previous marriage as beneficiaries to these funds, leaving another part of your estate for your spouse.

5. Sign a marriage contract

It’s awkward, but could be very helpful for a second marriage, where estate planning isn’t quite as straightforward as the first time around.

For more details on estate planning for blended families, head here.