Blended families – a family with a stepparent, stepsibling, or half-sibling – make up a growing segment of the U.S. population.  If you are a member of such a household or you have a child who is, you know that blending families can provide incredible joy.  It also brings particular challenges –one of which is creating an estate plan that cares for each member of your family.

Because blended families may include those with stepchildren, half-siblings, children born outside of marriage and children being raised by a single parent or by grandparents, there can be a wide range of considerations.  The good thing is that you are not alone, and many estate planning strategies have been developed to help blended families.  It may be difficult to sort through what works for your situation, but we are here to help.

Blended Families Do Require Special Considerations

Most of the default rules of estate planning work well for traditional families, with two spouses who remain married to each other, only have kids with each other, and everyone dies in the expected order.  However, reality is often quite different.  Although early estate plans were likely first created with these traditional families in mind, additional strategies have also been developed to create 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 relationships 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, reducing the potential of family conflict between children and 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.

Questions to Ask

Thinking through as many potential scenarios as possible during the planning process is critical if you want to create an estate plan that withstands the test of time.  Consider:

• 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 plan provides the perfect opportunity to explore these issues, so your plan can best protect who and what is most important to you.

Get the Best of Both Worlds

In many cases, what will best benefit your family is a combination of strategies as unique as you are.  If you have any questions about the variety of estate planning techniques that can help you specify exactly how your assets are distributed, we would like to help.  Give us a call today.

Also available on our blog:  Considerations When Choosing a Guardian for Minor Children and 5 Things Every New Parent Needs to Know About Wills

Have general estate planning questions?  Start with Estate Planning Basics & Benefits!

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Posted by Jim Foster

Jim Foster