The recipe for creating a blended family consists of a couple, a child or children from a previous relationship or relationships, and possibly a child or children the couple produced together.
Needless to say, estate planning for blended families can be challenging. Yet, the varying complexities are what make estate planning crucial for this group of individuals.
Here is the scenario…
In an effort to keep things simple, let us say that you have a child and a house, both from a previous marriage. You meet, fall in love with, and marry the person of your dreams. Your ex spouse is deceased. Your new spouse does not have any children, does not own property, and has never been married until now.
Both you and your spouse are living in your house with your child. It is your intention to care for your spouse in the event of your death, but it’s also your intention to provide for your child as well.
What’s more; your spouse adopted your child, because you both understood that only a blood relative or an adopted child can inherit automatically from someone who dies without estate planning. What this means is if your spouse dies last (following our scenario), the normal course of action would be for the house and other assets to transfer to your spouse and then transfer to your child after the spouse dies. The problem is that the surviving spouse (whether they would do so or not) has a right to do as they please with the assets they inherit. Without planning or without the correct plan, there would be nothing in place to prevent your spouse from disinheriting your child, selling your house, or in some way reducing your child’s inheritance.
However, with the use of a trust agreement, you can add a provision to allow your spouse to remain in the home after your death. Your spouse has full use and benefit of the property but is unable to sell the home. You have peace of mind knowing whichever of you dies first the property will ultimately go to your child.
Of course, this is just one example of a strategy which might work in one scenario. In truth, all families are unique, their stories are unique and no one plan fits every scenario.
The best solution for parents of blended families, or for anyone interested in estate planning, is to visit an experienced estate planning attorney and discover what plan works best for them.
