The American family portrait has transformed over several generations. Today, over 40% of families in the United States (including Nevada) are blended. A blended family is a family unit consisting of parents who have children from previous relationships. Managing the intricacies of these different relationships can be difficult, and the death of a spouse can compound financial and emotional problems, making things overwhelming.
A well-designed estate plan that makes it possible to honor your spouse and provide a legacy for your children is key to minimizing stress on surviving family members and heirs.
Planning Discussions with a Blended Family
Balancing the needs of biological children, stepchildren, and new spouses, blended families may face more complicated financial matters and emotionally intensified decision-making.
By engaging in family discussion on the topic regularly and early on, everyone can be better prepared emotionally and have a good idea of what to expect in the future. Important topics to discuss in these conversations are: Long-term goals, finances, contractual obligations, and guardianship.
Another element to consider in these discussions is whether a spouse wishes to include stepchildren and grandchildren, in addition to their children, in their estate planning documents.
Once you’ve outlined whom you wish to include in your estate plan, compiling a list of these individuals will make planning run smoother.
Tip: In addition to listing your beneficiaries (i.e., those you wish to receive your assets after your death), be sure to include individuals who will serve as your representatives during times of incapacity or after your death.
Having a family discussion and a basic understanding of your goals is only an initial step in family estate planning. An estate planning attorney can help you take the next steps by organizing your wishes, ironing out details, officially designating your desired representatives and finalizing your will or living trust.
Common problems that arise in blended family estate planning
Generally speaking, disputes over estate planning may be more likely to occur among blended families than in families with no stepchildren and stepparent relationships. Globally, women outlive men, and most disputes over estates, trusts, and inheritance arise between stepmothers and their stepchildren. Approximately 50% of active disputed-estate cases involved litigated disputes between stepmothers and their stepchildren (Forbes, 2018).
Some of the difficulties in blended family estate planning are often due to the following factors:
- multiple marriages;
- shorter or newer marriages;
- no prior estate planning;
- no estate planning discussions as a family;
- and attempted estate planning manipulation by excluded or aggravated family members.
Generally, spouses in blended families wish to provide for their surviving spouse and for their children from previous marriages. Accordingly, some spouses may wish for only their own children to inherit all of or the majority of the that particular spouse’s estate, and not necessarily provide for the children from a previous marriage of the other spouse.
In some cases, poorly planned estates may be altered during the last days of a person’s life, particularly when dementia may be a factor. The soon-to-be surviving spouse, children or stepchildren may exploit the situation with misplaced influence to change estate planning documents.
Setting Up Trusts and Conditions to Inheritance
In addition to some of the planning issues blended families face, as described above, a child or grandchild may struggle with substance abuse and addiction issues, which should be considered as you plan your estate. You may wish to have your estate planning attorney provide guidance for this type of situation.
For instance, you may decide to leave some inheritance for a particular family member or establish a trust for their benefit. Your attorney can help set up some parameters to ensure they receive their inheritance upon completion of certain conditions that you set in place.
For example, in the scenario where a loved one is suffering from addiction, the parameters may include the individual completing a rehab treatment and 90 AA or NA (Alcoholics Anonymous or Narcotics Anonymous) meetings. Additionally, you may wish to add a clause for drug testing before the beneficiary can access his or her beneficial interest.
Don’t procrastinate planning your estate
Often, estate planning seems like something that can be put off for just a bit longer. Some families may feel they can handle their own estates without any planning or without the assistance of an attorney because of their simple financial circumstances, assuming they have too little to warrant an estate plan. However, especially in the case of a blended family, having the foresight to plan out your estate early on will give everyone peace of mind and ensure your estate is administered and distributed as you desire.
Balancing the needs of biological children, stepchildren, and new spouses, blended families may face more complicated financial matters and emotionally intensified decision-making.