Marriage Second or Third Time Around? Money Does Matter
As I was reading the recent article in the New York Times "The Key to Wedded Bliss? Money Matters" about how much views and attitudes on money can impact a marriage and wedded bliss--it got me thinking about all of those people who end up in divorce, and what will happen to their families later in life, from an estate planning perspective.
Regardless of whether the main reason for divorce is money, divorce will definitely impact the future finances, assets, and methods of distribution for members of the divorced family unit.
For example, what happens if one spouse has substantially more assets and a greater earning capacity--and then starts a second family with new children. First, how does this impact the amount of lifetime support the children from the first marriage will receive? Second, what amount of assets will both sets of children receive from that parent at that parent's death?
Second, third, fourth, and/or "mourth" marriages bring a unique set of challenges to the table when considering estate planning. And in the Desert area it just seems that blended families are so common, probably again as a result of a population that is weighted more heavily to the retired or retiring population.
However, blended families not only cause complexity from a financial perspective, but also on an emotional level, too. In many cases relationships of blended family members are hospitable during the lifetimes of everyone involved, but then when a parent passes away and step-relatives are involved, once hospitable relationships begin to sour (to put it lightly), or turn into outright war between beneficiaries.
While having no estate plan is a poor recommendation, sometimes outdated estate plans (created before the divorce and not updated after) present their own set of problems. Further, even when planning does occur, it still may not adequately address how assets should be distributed to children from these blended families.
Parents of blended family situations should give serious thought as to how they want their assets to be handled after their gone, and consider in concrete terms how to execute their desired distributions at death.
