THE IMPORTANCE OF ESTATE PLANNING IN BLENDED FAMILIES

By: Adrienne Knack

There are many reasons for placing your affairs in order. Some of the most important reasons include reduction of liability for estate tax, probate court avoidance, leaving a legacy for your family, and ease of administration. A very common situation we assist clients with is estate planning for a blended family.  Long gone are the days of The Nelsons, as blended families are much more common in today’s world.  Whether it’s due to a death or divorce, there are many reasons a blended family needs to have the proper documents in place.

There are many different types of blended families.  We often see families that consist of two spouses that each bring children into the second or subsequent marriage.  There are also families where one spouse has kids from a prior marriage and the other spouse does not have children.  Sometimes, that couple wants to have children together as well, or both spouses bring children into the marriage and then have a child together.  Furthermore, there are families that have both adult children and minor children.  Whatever the family dynamic, there are serious issues that need to be addressed.  It is preferable to resolve these issues before they become a crisis – say, before someone passes away or becomes incapacitated.  Failure to properly address these issues will result in a legal mess for a surviving spouse (and children).One very important question in blended families is what will happen to minor children.  A guardian and conservator needs to be named.  Often, there is another parent that needs to be taken into consideration.  Does the other parent share custody?  If so, it is unlikely that their ex-spouse can (or wants to) leave the children with anyone else.  If the other parent does not share custody, it is significantly easier to dictate that the minor children will stay with their step-parent (and usually their other siblings and/or step-siblings). 

Another important issue that needs to be addressed is how assets will be divided and distributed to children in a blended family.  Do assets get divided equally between all children of both spouses?   Do the children the couple had together get more than the other children?  Often, specific language is necessary to inhibit the surviving spouse from disinheriting  step-children.  Many things need to be taken into consideration here, including whether or not the children will receive anything from their other parent or their other parent’s trust or estate.  Perhaps there is one child (or more) that is estranged from the parent and who the parent may want to disinherit.  Some families wish for each parent’s individual assets to go to their own children only.  There are many moving parts and many issues at play.  The language addressing these issues needs to be very specific and is highly specialized on a case-by-case basis. 

Another complicated question is who will handle the administration of the parents’ affairs (wills, trusts, powers of attorney) after their death.  Some blended families appoint an adult child of each spouse to serve in a co-capacity. Preferably, these step siblings have a good head on their shoulders and are looked up to by the other children.  Some families want each parent’s own child to handle their own affairs and not their spouse’s.  Or, perhaps, the parents do not want to put any of their children in the position to be the fiduciary so as to avoid potential conflict with their siblings or step-siblings.  In that case, a non-child fiduciary makes the most sense.  Every family is different and these issues can be addressed by consulting with an experienced estate planning attorney and having the proper estate planning documents in place.

Action Step:

Failure to address these (and other) blended family questions can result in severe consequences.  If probate is needed, it will be guaranteed to be a long, expensive, and tedious process through the court system.  It also opens the door for fighting within the family, which can lead to hard feelings, family estrangement, and a parent’s assets going to children and stepchildren they did not intend.

Proactively addressing these issues will help eliminate some of the tension that can arise in blended families upon a death of one of the parents.