Many people today get divorced or lose a spouse and then remarry. And, in many cases, people who remarry have children from prior marriages. This results in blended families – stepparents with stepchildren.
Hopefully, all goes well and your new marriage works out. It is quite likely, however, that one partner will outlive the other. In the case of a blended family, it’s important, when doing estate planning, to take into consideration the unique nature of your family. You want to do what’s best to maintain a good, ongoing relationship between the surviving spouse and the stepchildren.
Specifically, let’s talk about Trusts and Trustees. Often, a spouse with children from a prior marriage may have a Will that includes a Trust for the surviving partner. A Trust is a legal arrangement that sets specific assets aside for the care of a beneficiary (in this case the surviving spouse). The Trust contains instructions regarding how the assets should be managed. And, it identifies the Trustee(s) – the person(s) or firm that will manage the Trust.
In a blended family, the issue of who serves as Trustee, overseeing the Trust for the surviving spouse, can be tricky. If you wish to designate one or more of your children as the Trustee(s), be sure to carefully evaluate the situation. The terms of a Trust can vary widely. For example, in some Trusts, the beneficiary may only be entitled to income from assets (e.g., stock dividends). In other cases, the beneficiary may have access to both the principal and any income generated. Also Trustees are entitled to reimbursement for time spent managing the Trust. Being a Trustee can be very time-consuming and complicated. It also can give one individual a large say in the life of another.
So, it’s important that you assess the existing relationship between your spouse and the adult child who you’re considering to serve as Trustee. How do your child and your spouse get along? Do they trust and respect each other? Do they communicate often and well? Have you discussed your intentions with both of them and explained how the situation will work? Has either of them raised concerns?
Selecting a stepchild to serve as Trustee for a stepparent may work out very well, or it may cause problems. It is critical to carefully examine the issues. Seeking professional advice may be a good way to go.
Getting Legal Help
Experienced Estate Planning Attorney, Elga A. Goodman, can help you explore your options for establishing Trusts and selecting a Trustee. She can help you structure an estate plan that will meet your needs and those of your loved ones. Contact us today at 973-841-5111.
Posted in: Uncategorized