Estate Planning for Blended Families

Estate planning in the best of circumstances can be a challenging process, but it can become even more complicated when dealing with the issue of blended families. In a time when divorce and remarriage are common, many families include children from previous marriages, and the decisions as to who will inherit what may be complicated by the complex relationships among parents, step-parents, step- and half-siblings and other family members.

It may be only natural to want to pass on your assets to your biological children, but you may also want to provide for your subsequent spouse and even stepchildren. Balancing these sometimes disparate considerations can be a complicated and challenging experience. Even when blended families get along, the potential for acrimony, disagreement and even litigation among the different family segments exists.

At a minimum, each spouse of a subsequent marriage should have a will. In the absence of a will, as a result of the laws of intestate distribution, assets are likely to pass in ways which are inconsistent with your intentions. Yet a better approach is also to establish a trust, which will permit you to provide for the surviving spouse and still protect a portion of your assets for your children of a prior marriage.

Issues to be considered when planning for a blended family may include the following:

1. Are your beneficiary designations up to date? Have you successfully removed your ex-spouse from receiving any of your assets? In certain cases a beneficiary designation may trump a divorce decree or the terms of a will. Be sure that you have removed your former spouse as beneficiary in all cases and designated beneficiaries consistent with your current wishes.

2. Determine what you wish to leave to your new spouse and stepchildren, and what you wish to leave to your children, whether of the current marriage or a prior marriage. Consider the needs of all parties and strive to ensure that the assets are distributed in a way that reflects your goals. Establishing a trust can eliminate the possibility that the subsequent spouse will have the authority to change beneficiaries and disinherit children from a prior marriage after your death.

3. Consider establishing a prenuptial or postnuptial agreement which sets out the distribution of finances and properties upon your death.

4. Consider the purchase of life insurance as an effective way to provide a known amount to children from a previous marriage.

The most important thing you can do when planning for a blended family is be honest and open. Communicate your priorities and your wishes, and speak frankly but openly with your spouse, children and step-children so that all understand your intentions in making the decisions that underlie the estate plan. Such communication is crucial to avoiding ill will and resentment among survivors after your death.