Estate Planning for Blended Families
Every family and therefore every estate plan can be considered unique. However, a special set of challenges is presented when children from previous relationships are involved. Wills, trusts and other documents must be highly specific as to how the estate assets are to be managed and distributed.
According to data from the Pew Research Center, 16 percent of children in the nation are living in a blended family, which the U.S. Census Bureau defines as a household that includes a stepparent, stepsibling or half-sibling. Often, this results from a second marriage in which there are children of one or both of the spouses. In a first marriage, each spouse typically has the same estate planning goals as the other: providing for the surviving spouse for the rest of their life and then giving the remaining assets to the children — usually in equal shares. In a second marriage, however, there may be special instructions needed to ensure that children from earlier relationships are taken care of.
Many spouses write a simple will leaving all their assets to their spouse outright and trust that spouse to preserve the children’s inheritance. But this approach usually will not be sufficient for a blended family. Using a simple will can result in the children of an earlier relationship being unintentionally disinherited, particularly if one spouse dies much earlier than the other or if the surviving spouse remarries. Once the surviving spouse inherits the assets, they are under no obligation to leave any amount of property to their deceased spouse’s children. Another consideration, especially when the surviving spouse is much younger than the decedent, is that it may be an exceptionally long time before the children receive any benefit from the estate.
Spouses with blended families can use trusts to make sure that children from prior relationships get their fair inheritance. A typical scenario is to have the trust support the surviving spouse during their lifetime, then distribute the remaining funds to the deceased’s spouse’s children when the second spouse dies. Because the trust will technically own the assets, the surviving spouse has no authority to dispose of the trust property in their will. This allows spouses to provide for both their partner and their children adequately. It may also be helpful — in case the surviving spouse is significantly younger — to distribute some of the property to the children directly upon the elder spouse’s death.
Although estate planning can become complicated in a blended family, the basic guiding principle should be to leave nothing to the operation of state intestacy laws. All decisions should be made proactively with a view to having your assets transferred efficiently to the intended beneficiaries.
At Pennington Law, PLLC, we help Phoenix-area blended families create comprehensive estate plans to address their unique needs. Call 623-208-7867 or contact our office online to schedule your free consultation. Home and hospital visits are also available.