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Blended Families Have Special Estate Planning Challenges

Following the death of her father, Mary remained close to her step-mother. Mary’s step-mother eventually left the area to be closer to her biological grandchild. Following Mary’s step-mother’s death, Mary discovered that her step-mother had changed the terms of her father’s and step-mother’s joint trust and disinherited Mary, leaving everything to her biological grandchild.

Following the death of her father, Mary remained close to her step-mother. Mary’s step-mother eventually left the area to be closer to her biological grandchild. In a scenario experienced by many blended families, Mary discovered, following her step-mother’s death, that her step-mother had changed the terms of her father’s and step-mother’s joint trust and disinherited Mary, leaving everything to her biological grandchild.

There was nothing illegal about what Mary’s step-mother did. The step-mother and Mary’s father signed a joint trust, and as the survivor, she had the power to amend and modify the trust after her husband died. However, it is not likely that Mary’s father would have wanted this—unless he did, and did not tell Mary. There are far better ways to address this typical estate planning issue faced by many blended families, as detailed in a JD Supra article titled “Seven Estate Planning Considerations For Blended Families.”

Spouses can leave their assets separately and have their own revocable trust. When the first spouse dies, a trust can be established, so the surviving spouse has income and even principal. The surviving spouse should not be the only trustee, which would avoid the situation described.

Consider giving children a bequest after the first death. That way, if the surviving spouse needs to use all the funds, at least the biological children will receive something.

Make a joint trust irrevocable upon the first spouse’s death. If spouses sign a joint trust, then draft the trust, so that it becomes irrevocable on the first death.

Give thought to having separate bank and/or investment accounts and name children as beneficiaries, if you want them to inherit your assets. If assets are owned separately, there is a better chance of avoiding a lopsided inheritance or some children being disinherited.

Talk about your funeral plans. Do you want to be buried with your deceased first husband? Where do you want to be buried? Do you want the kids to decide? Avoid a lot of heartbreak by discussing this, as difficult as it may be.

Name a spouse and children as co-agents. If everyone works well and plays together, this could give everyone a voice in important decisions. You want to strengthen a family, not fracture it.

Communicate, often. This is not a one-time conversation. Blended families should not sweep this topic under the rug.

Check beneficiary designations. These are the forgotten distant cousins of estate planning. People create accounts, name beneficiaries and then often forget about them.

Blended families are always a work in progress and the better you can plan ahead for the death of one of the spouses, the more likely the family will remain a cohesive unit after one parent dies.

Our estate planning attorneys, experienced with blended families, understand the dynamics and be able to help you plan for a positive outcome that protects parents, children and grandchildren.


Reference: JD Supra (Nov. 14, 2018) “Seven Estate Planning Considerations For Blended Families”
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