No estate plan? Prepare for unintended consequences

Without an up-to-date estate plan, you could end up bequeathing part of your estate to an ex-spouse, disinheriting your own children, leaving less than you intended to your current spouse, or paying too much in estate taxes. Fortunately, there are a number of estate planning tools that can help avoid these unintended consequences.

• Disinherit your ex-spouse: To avoid accidentally bequeathing part of your estate to your ex-spouse, review how all assets are titled and check beneficiaries on all life insurance policies and retirement accounts. Update estate planning documents, removing your ex-spouse.

• Protect your own children: Consider a trust for the benefit of your children. Even if one or more of your children predeceases your ex-spouse, their inheritance can go to their children or be split up among the trust's other beneficiaries. Nothing has to go to your ex-spouse.

• Provide for your current spouse: If you leave your estate to your current spouse without explicitly providing for your own children, your estate could end up in the hands of your spouse's children when he/she dies, leaving your children out of the picture. A Qualified Terminable Interest Property (QTIP) trust can help prevent that from happening. A QTIP trust can pay income and part of the principal to your current spouse for the remainder of his/her life, and then transfer the remaining assets to your children when your spouse dies.

• Minimize estate taxes: If an insurance policy is set up properly, the proceeds are distributed free of both income and estate taxes. Another benefit is that the life insurance policy can be used to pay proceeds to specific beneficiaries you designate, including your current spouse and your own children.

• Protect your individual assets: If you're heading into marriage, a prenuptial agreement can detail what will happen to your individual assets in the event of divorce or death. Think carefully about holding property jointly. No matter what your estate planning documents state, property held in joint tenancy with rights of survivorship passes to the other owner.

Blending families is not an easy task. Making estate-planning decisions in a blended family environment can be complex, but it is a subject that should not be ignored.