Elanor and Noah have been married for ten years. They both had children from their previous relationships. They prepared a will and cooperated on the undertaking.
When Noah passes, Elanor will inherit the family property, and vice versa. Elanor’s children will inherit the estate after she dies. As a result, Noah’s children will have to rely on Elanor to know if they will receive any inheritance.
With a blended family like Elanor and Noah’s, they both need to make sure that their children from previous relationships are taken care of when they pass away.
As a result, they devised a strategy to ensure that all their children receive an inheritance so they will not have to worry about who gets what in case they pass away. Wondering how you can create an estate plan for a blended family?
Here are a few tips for blended families trying to put together an estate plan.
1. Set up trust
Setting up a trust is the best way to streamline your income and estate. You will delegate your property and inheritance to your spouse and your children with the help of a trust. In Canada, it is easy to establish trust. But you must deal with the complex tax laws surrounding it. You must know the 21-year tax rule for trusts in Canada. The 21-year rule requires a trust to sell their funds every 21 years and acknowledge the profits.
Talk to an advocate about how you want to set up the trust and beneficiaries.
2. Discuss and find common ground
Take some time to talk about your will and beneficiaries with your family. For consolidating finances, it is vital to have open and honest conversations.
Bring all your investment properties, vacation homes, retirement funds, and other savings to the table. Find a point of agreement. The children will get the inheritance that is planned and pre-determined.
3. Update your documents
Make sure that you have updated your documents. And have added the name of your spouse and children in the required financial documents. It will help you clarify the finances of the family members. Make sure you update the name of beneficiaries on your savings plans, insurance documents, and other investments as well.