How Do You Split an Estate in a Blended Family?
Estate planning attorneys know just how often blended families with the best of intentions find themselves embroiled in disputes, when the couple fails to address what will happen after the first spouse dies. According to the article “In blended families, estate planning can have unintended issues” from The News-Enterprise, this is more likely to occur when spouses marry after their separate children are already adults, don’t live in the parent’s home and have their own lives and families.
In this case, the spouse is seen as the parent’s spouse, rather than the child’s parent. There may be love and respect. However, it’s a different relationship from long-term blended families where the stepparent was actively engaged with all of the children’s upbringing and parents consider all of the children as their own.
For the long-term blended family, the planning must be intentional. However, there may be less concern about the surviving spouse changing beneficiaries and depriving the other spouse’s children of their inheritance. The estate planning attorney must still address this as a possibility.
When relationships between spouses and stepchildren are not as close, or are rocky, estate planning must proceed as if the relationship between stepparents and stepsiblings will evaporate on the death of the natural parent. If one spouse’s intention is to leave all of their wealth to the surviving spouse, the plan must anticipate trouble, even litigation.
In some families, there is no intent to deprive anyone of an inheritance. However, failing to plan appropriately—having a will, setting up trusts, etc.—is not done and the estate plan disinherits children.
For example, some spouses agree to leave everything to each other in a “sweetheart will” (the term “sweetheart will” is a moniker for “I leave everything to my sweetheart”), with a promise by the survivor to treat the children from the predeceased spouse equally with the children of the surviving spouse. But I tell my clients that they cannot rely on such a promise by the surviving spouse to treat the children of the deceased spouse equally. Such a promise is not enforceable under the law. The best way to have an enforceable “joint will” is by using a living trust. This would be a legal document specifying how assets are to be distributed amongst all of the children on the death of the second spouse to die.
While a “sweetheart will” occassionally be a good idea if one or both of the spouses has no children, even then a “sweetheart will” presents certain asset protection issues that my clients must to be aware of. This is why I often say a “sweetheart will” is not a plan. It’s a document, not a plan. Clients should hire an attorney to develop a long term asset protection plan that removes the issues that worry and burden so many clients, while at the same time one that is cost effective and minimizes both income and estate taxes, and minimizes costs of administration.
Also, it’s important for the will, trusts and any other estate planning documents to define the term “children” and in some cases, use the specific names of the children. This is especially important when there are other family members with the same or similar names.
As long as the parents are well and healthy, estate plans can be amended. If one of the parents becomes incapacitated, changes cannot be legally made to their wills. If one spouse dies and the survivor remarries and names a new spouse as their beneficiary, it’s possible for all of the children to lose their inheritances.
Most people don’t intend to disinherit their own children or their stepchildren. However, this occurs often when the spouses neglect to revise their estate plan when they marry again, or if there is no estate plan at all. I, as an estate planning attorney, have seen many different versions of this, and I can create a plan to achieve your wishes and protect your children.
Hopefully, this article has helped answer the question, “How Do You Split an Estate in a Blended Family?”
One final note: be realistic about what may occur when you pass. While your spouse may fully intend to maintain relationships with your children, lives and relationships change. With an intentional estate plan, parents can take comfort in knowing their property will be passed to the next generation—or two—as they wish.
BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.
If you liked this article, “How Do You Split an Estate in a Blended Family?” read these additional articles: Can I Avoid Password Problems for My Family in Estate Planning? and Do Dental Problems Mean Cognitive Impairment? and Why Naming Beneficiaries Is Important to Your Estate Plan and What Does an Elder Law Attorney Do?
Reference: The News-Enterprise (Dec. 7, 2021) “In blended families, estate planning can have unintended issues”