What is a Blended Family?
An estate plan is an important asset for any family, but even more so when the spouses involved have children from previous relationships, we call these “blended” families. Decedents from blended families have a different set of intestate rules apply to them. Typically, a blended family doesn’t realize that their situation creates complex inheritance issues upon the death of the first spouse. Therefore, a trust ensures appropriate distribution of the assets.
Why is Estate Planning Important for Blended Families?
Typically, spouses own all property jointly. Upon a death of a spouse, jointly owned property passes to the surviving spouse. Therefore, if Spouse 1 has two children from a previous marriage and two children with their current Spouse (“Spouse 2”), how can they be sure that Spouse 2 will continue to provide for their two children from a previous marriage? While everyone may get along while Spouse 1 is alive, their death could lead to a fraying of the family. Furthermore, this separation usually is exasperated the longer that the surviving spouse lives.
Indeed, it is important that the family executes an estate plan. Typically, in the form of a trust, which specifies which children will inherit and in what amounts. Additionally, this trust would become irrevocable upon the death of the first spouse. Meaning the surviving spouse would not be able to change the inheritance after the death of the first spouse. While to many blended families this scenario would be unimaginable, it happens far more often than many would realize.
Other Considerations
Additionally, similar planning should take place in a first marriage for a young couple with children. If one of the spouses were to tragically pass away at a young age, it is important that the children are protected should the second spouse decide to remarry. Other estate planning documents, such as a contract to plan, can fill the void of an irrevocable trust when the situation does not call for that level of complex planning.
Finally, it is important to reiterate that every family reacts to the death of a patriarch or matriarch differently. While everyone may get along now, things can change drastically after a death. An estate plan is there to protect all interested parties and ensure that your wealth and legacy passes on to the next generation exactly the way that you intended.
