Today, blended families are rather common. A blended family is defined as a marriage where one or both spouses come with children from a previous relationship. Either the previous marriage ended in divorce or due to the death of a spouse. These situations present special planning considerations. Failure to seek proper legal counseling (not just document preparation) can be disastrous.
Hypothetical example: Tom has a child, Maria, from a short-lived marriage that ended within a year of college graduation. He retained custodial rights after the divorce and still, after 16 years, has a good relationship with Maria. Tom married his current wife when Maria was 13. He now also has a 2 year old and one on the way. They are quite happy all living together and Maria enjoys caring for her younger siblings. She also gets along pretty well with Tom’s wife. Tom and his new wife’s concern was how to provide for both “sides” of the family in the event of Tom’ early death.
Tom wants to provide for all of his children as well as his wife. However, because Maria is a minor, her natural mother (and not Tom’ current wife) would have custody over Maria in the event of Tom’ death. The fact that Maria is a minor yet remains a concern because Tom does not want to leave money that could be reached by his ex-wife and not directly benefit Maria. Tom wants to provide for Maria, but not have his spendthrift ex-wife control the money OR his current wife control the money. What should he do?
To address these concerns we needed to engage Tom’s financial advisor to assure that sufficient money was set aside for both Maria and his wife and young children. It is extremely important to bring your financial advisor into the mix to assure that all planning angles are addressed. We work directly with our clients’ advisor(s) to assure that both financial and estate planning goals are aligned. With Tom’s financial advisor’s help, we made sure that money was set aside for Maria, in an account managed by Tom’ sister (Maria’s aunt) and would help her pay for college as well as any other medical and support needs she may have. The account also has additional protections so that Tom’ ex-wife has no rights or control over the money. Additionally, Tom will leave behind funds to support his wife and younger children.
We provide free consultations for you to learn about your options and what’s right for you. Call us at 616-365-5055.