Posts Tagged Estate Planning

Last time we looked at planning for blended families in general terms. Now let’s discuss some specific trusts that you might want to consider. One such trust, which provides an excellent form of asset protection, is called a Qualified Terminable Interest Property Trust (QTIP). The QTIP trust can generate income for the benefit of the surviving spouse during his or her lifetime. When the surviving spouse passes away, the QTIP’s assets can be distributed between mutual and prior children according to the wishes of the previously deceased spouse. In addition, if the children from the previous marriage are young, assets from the QTIP Trust can be held in another trust for the children, under the control of an independent trustee. This can prevent the assets from falling under an ex-spouse’s control. You might also want to consider a Long-Term Discretionary Trust (LTD Trust) to administer your children’s inheritance, with a

Planning for blended families can present unique challenges, in part because the interests of a current spouse and any mutual children often conflict with the desire to provide for one’s children from a previous marriage. For example, if all of an estate’s assets are left to the new spouse, the children from a previous marriage may not be provided for in the manner the deceased spouse would have wanted. After all, there is no legal obligation to support stepchildren. Furthermore, the surviving spouse might, upon his or her death, leave all of the assets to his or her children, thereby excluding the children of the spouse who passed away first. Similarly, if assets are left only to prior children at the death of their parent, there may not be enough assets remaining in the estate to provide for the current spouse or family. Even with a harmonious blended family, failure