Blended families have become normal, with second and subsequent marriages often making up the modern American family. They may have children from a prior marriage and children together. Estate planning complications for these families can result in inheritance errors. This can harm family relationships, and, in a worst-case scenario, end in costly litigation that can, and should, be avoided with careful planning up front.
If you are bringing both assets and children into a new marriage, you may want some, all, or most of your assets to go to your own children. Or, you may choose to leave all your assets to your new spouse for care during his or her lifetime. Perhaps you would prefer to leave assets to both your surviving spouse and their children from a prior marriage, to ensure that everyone will receive a portion of an estate. Without a proper estate plan guiding your specific wishes, accidental disinheritances may happen. The wrong people can get everything, and the people you love, who you wanted to inherit from you, can be left with nothing—often with no legal remedy to undo what has gone wrong.
In some situations, your surviving spouse is not legally obliged to pass along the inheritance you intended for your children. Though it may seem unlikely now, what happens if, after you pass, your spouse and children grow apart, or they have conflicting interests down the road? Without a protective estate plan your surviving spouse always has the option to execute a new Will or Trust and disinherit your children. You may have a surviving spouse that is young, and may deplete most of your children’s potential inheritance, leaving little or nothing to be transferred to your children when your surviving spouse dies. If you plan your estate carefully, you can protect the people you love, and avoid an accidental, or, intentional disinheritance by your surviving spouse—contrary to your wishes.
There are modern solutions to these now common estate planning problems. In a modernly drafted Will or Trust, you can control your specific wishes and goals, and achieve your objectives regarding your spouse, and all your children, the way you choose.
Many blended families have used Trusts to address their estate planning objectives. Trusts and subtrusts can be designed for the specific person who is to inherit specific assets. The surviving spouse can receive income for their benefit throughout their life. They can also be restricted from accessing the trust’s principal, which, ultimately, can then be transferred to your children upon the passing of your surviving spouse. Another protection available in trust planning can prevent your surviving spouse from changing the terms of your planning. This stops a surviving spouse from disinheriting your separate children.
Another tool for blended family planning can expressly state that, upon your death, your surviving spouse must provide specifically identified assets—money or otherwise—to your children, so your children do not have to wait until your surviving spouse dies to receive assets from you. In this manner, your children are guaranteed to benefit from your estate.
Some families also choose to use life insurance, to designate death benefits payable to their children. With life insurance, your children can receive a large cash sum immediately upon your death, and remaining estate assets can be left to support your surviving spouse if you wish.
Modern estate planning should address issues modern families face, and most importantly, your specific wishes. At Anderson & Jahde, we understand and regularly help modern families with these complicated issues. Call us when you are ready to plan for your family. We are here to help you.