Before you enter a second marriage where you and your children will become a blended family with your future spouse and his or her kids, there are some important financial planning steps you should take.
You can safeguard your children’s financial future with these legal documents.
FindLaw explains that you can put just about anything in this marital contract as long as it is legal, you and your future spouse are honest with each other and neither of you puts pressure on the other to sign unwillingly. After you both list all your assets and liabilities, you can sit down together and decide what rights and responsibilities each of you will have.
Perhaps you will want to specify that a certain account is for your children’s college savings, or that certain assets will be theirs when they become adults. Then, even though you contribute to the accounts or assets during the marriage, they do not become commingled property but remain set aside for your children. If you died unexpectedly, instead of becoming your spouse’s the assets would go to your children.
Life insurance trust
Delving further into the topic of inheritance, you may want to create a life insurance trust for your children to provide for them after you are gone, according to Nerd Wallet. You create this type of trust and purchase the policy through it. You fund the trust with the money to purchase the policy and pay the premiums, and the trust is the owner and beneficiary of the policy. When you die, the insurance money goes into the trust, and the trustee manages it for your children.
By taking care of these planning matters before you marry, you and your future spouse are engaging in a level of financial honesty and openness that bodes well for your relationship.