Blended families have a special requirement for estate planning, because of the added complexity to the family structure. A family has many definitions, and the incidence of blended families is rising. Blended families arise when two people marry and each has a child or children from a previous relationship. Unfortunately, this can lead to a dispute over a will if one or both partners were to pass away. If you are a part of a blended family, it is important that you all work together to thoughtfully create a way for your assets to be divided. This can save many future disagreements and arguments.
The first point to make is that you should write a will. If you don’t, you’ll die intestate (which means without a will). The courts will decide how your assets shall be divided according to the intestacy laws of the state. Unfortunately, this could mean all your assets be passed onto your spouse and none saved for your children. It could mean some miss out on their fair share or your assets are divided in a way that you would not agree with. Whatever the case, creating a will is far more beneficial for blended families than dying without one.
If members of your blended family, including a step-child, feels as if they have missed out on a fair inheritance, they can contest your will in court. This can cause great friction within a blended family, as well as a costly and exhausting estate battle. It is important that if you are part of a blended family, you have considered options and solutions to prevent future disagreements.
Estate Planning Options for Blended Families
One good option is to utilise a testamentary discretionary trust, so that you have better control over how your assets will be divided. A testamentary discretionary trust is a type of trust created under a will, comes into existence only upon the administration of the deceased estate
Choose a beneficiary you trust to financially provide for your spouse and your children. A testamentary trust will protect your assets for your children from your first relationship. It’s tempting to assume that your new spouse will ‘do the right thing’, but we have seen this assumption proven wrong countless times.
You may create two testamentary trusts, one for your children and the other for your partner’s children. This is beneficial if both of you were to pass away at the same time, in a car accident, for example. You could also choose to divide the entirety of your estate between your children, your partner and his/her children. Or you may wish to exclude your step children. If you were to have children in your new marriage or partnership, you could also include them in your will.
However, you may also choose to give all of your estate to your new partner, with no assets to be given to your children or your partner’s children. Whatever your decision, it is best to discuss with your family and to be written in your will to avoid future disputes.
Blended Families Need A Will As A Bare Minimum
Without a will, your estate can be divided by the court according to the intestacy laws of your state. In your will, you can appoint trustworthy executors, make arrangements for the care of any minor children, and even detail plans for your funeral. Without a will, many of these decisions are left to the court.
Another option is to create mutual wills which allow for your assets to be divided equally between all the children in your blended family. Mutual wills mirror one another or in other words are identical wills. In the absence of Mutual Wills nothing will stop the surviving spouse from changing their will and cutting their spouse’s children out of their will or making sure that only their own children are provided for.
You may also have special assets which you wish for only your children to receive. It could be anything from your grandmother’s brooch to a special kitchen knife. However, even sentimental items can create a rift in the family if your wishes are not communicated clearly. Instead, write the gifts in your will and a statement of intention to clarify your decisions on the matter.
Planning and writing a will can be difficult when dealing with a blended family. However, it is important if you sit down with all members in your family and discuss the elements of your will. To save future disagreements if you were to pass away, communication is key. Ensure everyone has a say and understands your decisions to reduce the potential for an estate battle after your death.
A blended family can create more complexity for the purposes of estate planning, but it is necessary to ensure that everyone in the family is protected. An estate battle in court is time-consuming and costly, and thoughtful estate planning is an easy solution. Estate planning can be difficult and may create some uncomfortable discussions, however, it is recommended to have those discussions now rather than wait until after you or your spouse pass away.
For more information about estate planning and blended families, please contact us today. We offer a FREE 10-minute phone consultation.