Do you have stepchildren? Are you a part of a classic blended family?
It is a reality for modern households to consist of two blended families rather than the classic family dynamic. Couples bringing together children from former relationships and living together with half-siblings or stepsiblings can be a struggle particularly when the time comes that one partner passes away. Life insurance professionals can help you look at all your options so that you feel secure knowing that everyone within your family is being looked after once you have gone.
Financial messiness can tear apart any family however when it comes to blended families if one spouse passes away it is not unusual that the bulk of assets will go to the surviving spouse. Leaving everything to your spouse doesn’t always work in the favour of the children that are involved. Here are a few options you could consider if you are a part of a blended family.
- Setting up a Family Trust: Family trusts are designed to protect your assets and benefit members of your family after you are gone. When your assets are in a family trust you no longer have legal ownership, your assets are owned by the trustees, for the benefit of your family members.
- Splitting ownership of Life Insurance policies between your partner and a child: Putting in place a Life Insurance policy for your family can ensure equalisation. A life insurance policy can help provide family members with protection after the insured passes away.
- Giving a “life interest” in your assets to your partner with the assets transferring to your children once your partner passes on: You can use a Will to create a Testamentary Trust in which gives life interest in an asset to your partner. The capital residue will be left over to the children once your partner passes away.
Already have life insurance? Here are a few things you should check:
- Check who the policy owner is: This is the person who will get the proceeds of your policy if there is a claim. If you took out a life insurance policy with a previous partner do you still own this policy even though you are no longer together? This is important to check as your previous partner may not be interested in helping your current partner.
- What do you want to happen to the proceeds?
If you die and don’t have a Will what will happen to your proceeds? If you die without a Will in place the courts will determine where your proceeds will go. This may not benefit your spouse or your children.
- Is the Trauma, Critical Care or Crisis Cover accelerated from the life cover?
If paid out, your critical care trauma or similar may reduce the balance of your life cover. Click here to find out more.
At Protection Solutions we can help you develop a tailored solution for anyone who finds themselves in this situation. Contact us today and one of our advisers will be in touch.