Are you worried about securing your spouse’s future while also protecting your children’s inheritance? Balancing different family member’s needs is a common concern in estate planning, especially in blended families. Juggling the responsibilities of supporting your current spouse and children as well as children from previous marriages can feel overwhelming. Effective estate planning, particularly through the use of trusts, can address these concerns and provide peace of mind.
The Power of Trusts
I recently met with a couple dealing with this precise situation. The husband, knowing he might pass away before his wife, wanted to make sure she could continue living comfortably. He also wanted to leave an inheritance for his children from a previous marriage. By creating a trust, he arranged for funds to be managed for his wife, giving her a steady income stream. After she passes away, the remaining money in the trust will go to his children.
Clear Objectives and Communication
Effective estate planning begins with defining your goals. My client had three: ensuring his wife’s financial security, maintaining her lifestyle, and providing for his children. Creating a trust helped him achieve all three. Before meeting with his lawyer, he discussed his goals with his family, promoting transparency and preventing conflicts.
Investment Strategies for Trusts
Investment decisions within a trust should be tailored to meet long-term objectives. For example, in my client’s case, we planned for the trust to grow while he was alive, with a future strategy to provide his wife with a stable income after his passing.
Practical Tips for Your Estate Plan
- Communicate Clearly: Discuss your plans with your family to avoid misunderstandings.
- Customize Investments: Tailor your investment strategy to balance growth and income needs over time.
- Fair Distribution: Clearly define how your assets will be distributed among your heirs to maintain family harmony.
Creating a solid estate plan involves both a lawyer and a financial advisor. If you need help positioning your investments to meet your estate plan’s goals, contact us at (02) 624-2788 and we’ll put our cross-border experience to work for you.
Douglas Goldstein, CFP® is the director of Profile Investment Services, Ltd. www.Profile-Financial.com. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published November 19, 2024.