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Disclaimer: This article on estate planning for blended families is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
More than one in four Canadians in a relationship are in their second or subsequent marriage or common law relationship. That means that many of us have experienced a family in more than one context, with more than one partner and, sometimes, with children from each union.
The nuclear family – two married parents, their own children, and sometimes the grandparents – is no longer the only family structure. Increasingly complex family structures mean making increasingly complex decisions, and nowhere is that more true than in estate planning.
If this situation describes you, it is vital that you do not leave your estate planning to chance. A comprehensive estate plan, including a well-written will and powers of attorney, protects your entire family and your own wishes. We strongly encourage you to contact us today about your estate planning needs. Our experienced professionals can create a plan that is tailored for you and that takes into account all of your family members.
In this article, we will talk about how your estate plan will affect various family members, what you ought to take into consideration and how you can give your family the greatest gift of all – peace of mind.
Estate Law Updates
As we previously noted, on January 1, 2022, updates to the Succession Law Reform Act came into effect. A new marriage no longer revokes a previous will. This means that if you remarry and do not create a new will, your new spouse will not automatically inherit your estate.
Children from a previous relationship
You must make specific arrangements to ensure that the children receive what you wish them to have. While you may assume that your spouse will care for your children after you pass, there is simply no guarantee of this.
If you have children from a prior relationship, the executor of your will or estate plan must take into account their situation and appropriately provide for them. You could also possibly create trusts to ensure that they are cared for financially.
You also want to ensure that your spouse is taken care of properly in the event of your death. This can include leaving them a lump sum, setting up trusts, or other financial arrangements. Your will should also consider any special needs your spouse may have and ensure they are provided for.
You may also want to use vehicles such as RRSPs, life insurance, and other investments to provide for them in the event of your death.
When it comes to your home, you may want to add your spouse to the title now. Otherwise, they find themselves in a vulnerable position upon your death. As tenants in common or joint tenants, they will be protected should the home need to be sold.
However, it is not as simple as registering your spouse’s name on title. There are tax considerations to consider. Therefore, you need to make clear what your intentions are with respect to adding your spouse on title. It may mean creating a resulting trust , or setting up a spousal trust to ensure that the house passes in accordance with your wishes.
Finally, your will should detail any special gifts you want to leave to your spouse.
When you create a will, you may want to consider leaving specific items to particular family members. Your will should detail all gifts, from jewellery to artwork or furniture. This ensures that the wishes you expressed during your life are respected after your death.
Estate Planning: Factors to Consider
When your family situation is complex, it is important that you consider all factors when creating your estate plan. How can you mitigate potential disputes between family members? What financial arrangements can you make to ensure that all of your loved ones are provided for? How does the law impact you and your family’s situation?
First, take an honest look at your situation. Do your children get along with your new spouse? Do you get along with your spouse’s children? If you have children together, along with children from a previous relationship, consider how they are related to each other. Consider also how you would like them to be treated in the event of your death.
Second, consider what assets you have and who will be responsible for them upon your death. This could include your home, investments, life insurance policies and personal items with sentimental value. Consider setting up trusts or leaving money specifically to certain family members to ensure it passes in accordance with your wishes.
Third, give careful thought to who will act as your estate trustee. If there are tensions between family members, you may want to consider an independent and unbiased executor.
Fourth, be open and honest with your family about your wishes. Discussing your will or estate plan in advance can help to avoid confusion and disputes after you pass.
Finally, keep your estate plan updated as circumstances change. Make sure your estate plan reflects any significant life changes, such as a new grandchild or changes in marital status.
Estate Planning With You in Mind
Finally, seek professional advice from a lawyer and financial planner to help you navigate these various factors. You want to ensure that your estate plan reflects your wishes as well as minimizes any tax implications for you or your beneficiaries.
At Beeksma Law, we understand that each family’s situation is unique. We strive to provide you with the advice and assistance that meets your needs. With careful planning, proper preparation and expert advice, you can ensure that all of your loved ones are provided for and that your wishes are respected after you pass.