Today, blended families have outpaced the traditional nuclear family by quite a margin. There are many estate planning strategies developed to help blended families.
Catering estate planning strategies to meet the needs of blended families
Being a spouse in a blended family is very common. Even if you aren’t in that situation personally, your children who are married now may find themselves in a blended family in the future. If the statistics are to be believed, someone in your family is in a nontraditional family. Blended families also include those with stepchildren, children born outside of marriage, and children being raised by a single parent or by grandparents.
Most of the default rules of estate planning can work well for traditional nuclear families, with two spouses who remain married to each other, only have kids with each other, and when everyone dies in the expected order. But, how often does that happen? Reality is often quite different from this default model. Although estate planning best practices were first created with these traditional families in mind, additional strategies have been developed to set up a robust and protective estate plan for a blended family.
Here are just a few of the complexities that can arise in estate planning for blended families:
- Joint tenancy issues: In blended families, it’s all too easy to accidentally disinherit children. This may sound surprising, but it is a relatively common problem that can arise when spouses with children from previous marriages place assets (like homes, automobiles, and bank or investment accounts) into joint tenancy without fully considering the impact this can have on those children. At the death of the first spouse, all assets that are held in joint tenancy pass to the surviving spouse automatically. Once these assets become the property of the surviving spouse, he or she is under no legal obligation to pass them on to the children of the deceased spouse.
- Outright inheritance issues: When spouses bring children from previous unions into new marriages, a will or trust that provides for outright distributions to a surviving spouse can complicate the matter of inheritances, and, like joint tenancy, can result in a child being disinherited unintentionally.
- Increased risk of family conflict: For many blended families, mitigating against the potential of family conflict from children against stepparents is a top priority. No one wants their assets squandered in legal proceedings if conflicts arise between biological and stepchildren after the death of a parent. Comprehensive, thoughtful estate planning can substantially reduce or even eliminate this risk.
The most important thing about making sure your estate planning decisions stand the test of time is going over as many potential situations as possible in the planning process. If you’re in a blended family now, would you and your spouse like to keep your estates separate, or will you combine your estates to match your new blended family? Are there particular assets you want to make sure a certain child ends up with? Do you have a particular concern about one of your child’s spouses? Working on your estate planning is the perfect time to explore these issues, so your plan can best protect who’s important to you.
Get the best of both worlds
In many cases, the answer is a combination of strategies as unique as you are. If you have any questions about what sorts of estate planning strategies could help you make sure your assets are distributed exactly as you wish, please don’t hesitate to get in touch.
