Get “The Best Of Both Worlds” for Blended Families

One of the most loving things you can do for your family this Valentine’s season is to make an estate plan that will show them just how much you’re thinking of them. For blended families, it’s especially important that your plan be very clear. Simply relying on your people to “do the right thing” isn’t enough because people have different interpretations of what the “right thing” is. For example, what if my husband survives me and he meets “Trixie”? Or what if my wife survives me and meets “Biff the Pool Boy”? Or if my spouse needs expensive long-term care, is it OK if that reduces my children’s inheritance? 

Is Your Plan Set Up to Work Regardless of What Happens, or is it Vulnerable to Failure?

A personalized, thorough estate plan needs to give you “sleep through the night peace.” For example, acquiring a modern Long-Term Care insurance policy can be used to take care of the sick spouse, while avoiding a catastrophic drain on your savings. Such a policy can extend the time of home care, or reduce the out-of-pocket cost of nursing home care. Your pre-nuptial agreement may say that you are not responsible for your spouse’s care costs, but the care facility or nursing home won’t agree with that excuse, and will insist that you use all available assets.

Couples also place assets in a specially designed trust to prevent those assets from long-term care costs. We call these “Nest Egg Trusts,” and they are extremely useful, whether used alone or in conjunction with Long-term Care insurance. Simply put, the assets you transfer to your “Nest Egg Trust” are out of reach of the nursing home, once five years have passed since you set up and funded your trust. You can be the Trustee(s) of your own trust, by the way, and it doesn’t burden you with any new or increased taxes. Your Nest Egg Trust can also make sure that when both of you are gone, the trust assets go to the right beneficiaries.

An Irrevocable Trust Can Give “The Best Of Both Worlds”

An irrevocable trust (whether it’s a “Nest Egg Trust” or other variation), also solves the “Biff and Trixie problem.” Although the trust helps to take care of the surviving spouse financially, its rules (which the two of you designed and agreed to) protect those assets from being grabbed by the wrong person, but at the same time it takes the surviving spouse “off the hook” – so he or she can say “I’d love to (spend trust money for …), but I’m sorry – the trust doesn’t let me do that.” That way, the surviving spouse doesn’t come across as selfish or mean, they’re just explaining “how the lawyer set it all up.”  That way, the children need not fear losing their inheritance, and the surviving spouse can even remarry without the risk of losing control of the assets you’ve chosen to protect. In other words, they have “the best of both worlds.”

At HighPoint Law Offices, we understand how important it is to have specialized estate plans for your family’s unique needs. We have the experience and dedication to make a trust that works for you and your loved ones. To schedule a consultation, fill out a contact form on our website, or call (215) 997-9773.

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HighPoint Law Offices PC

At HighPoint Law Offices we support individuals, families, and businesses of all backgrounds with estate planning services that address their unique wishes, goals, and challenges.

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