Navigating Blended Families, Estate Planning, and Inheritances
Did you know — per the U.S. Bureau of Census — 1300 new stepfamilies are formed daily? More than 40% of families in the U.S. are blended, meaning at least one partner has a child from a previous relationship before marriage.
Blended families bring unique dynamics and opportunities for growth. These families often face challenges like navigating different parenting styles and establishing new family traditions. However, with open communication and thoughtful planning, blended families can create strong, supportive bonds and build a harmonious household where everyone feels valued and connected. Blended families also present a unique opportunity to use Trusts to ensure all children are taken care of and nobody gets left behind.
Challenges Unique to Blended Families
While everyone may get along effortlessly while a parent is alive, things can become more complicated in a blended family after a parent dies. Why? The law hasn’t fully adapted to our modern definition of “family” and often favors the surviving spouse. This setup can work well when the couple has children together. Still, when a deceased parent has a child or children from another marriage or relationship, the children can — and often are — cut out of an inheritance.
Aside from the law not favoring the realities facing so many blended families, several other factors can contribute to this situation:
Confidence in the New Spouse: The parent may trust the new spouse entirely and cannot imagine them acting against their other children’s interests.
Conflicting Interests: The new spouse might prioritize their interests or those of their own children from a previous marriage over the deceased’s children.
Lack of Legal Awareness: The parent may be unaware of the potential consequences and might not have consulted a knowledgeable attorney, leaving the decisions to the courts and state laws — never the best approach.
Understanding these dynamics can help blended families proactively ensure that everyone’s interests are protected.
More Common than You’d Think
Imagine a young woman’s dad owns several properties, including her childhood home. After he remarried in his late 50s, his health began to decline. His new wife took charge of his finances. She arranged for her husband to qualify for Medicaid by transferring his assets to her, assuring him that this move would protect his family’s property.
When he passed away, all his property was in his wife’s name — and control. Instead of distributing all assets to her late husband’s children (as she had verbally promised she would), she instead sold everything and kept the money for herself and her daughter. His children ended up with nothing. And, because his wife legally controlled the assets, the children could not take any action to gain control of what their late father had wanted to leave for them upon his death.
Yes, this is a terrible situation and certainly not the outcome the late father would have wanted. It is also completely legal. His wife could legally do whatever she wanted. All properties had been transferred to her name, and the children had no recourse. Even the people you love and trust the most can make surprising choices when money and assets are involved. If the father had worked with a trusted lawyer who is an estate planning professional, this situation would never had this unintended result.
Considerations to Protect Your Children and Blended Families
The good news is that you can take steps now to protect your family from heartache and chaos once you pass on:
Embrace the Inevitable: Thinking about death is unpleasant, but it is an unavoidable reality for all of us. Just because we are uncomfortable talking about death does not mean we can ignore it. We can accept death as a part of our human existence and take control. Make plans while you can to ensure you can protect what — and who — matters most.
Host a Family Meeting: Once you’ve had time to think about what you’d want to happen with your assets once you pass on, have a heart-to-heart about your wishes, values, and goals with the people you love the most. This open conversation backed by proper legal documentation can go a long way in preventing misunderstandings when you are no longer around to clarify.
Educate Yourself: Educate yourself now and find an expert you can trust. Don’t rely on the internet or the online advice of strangers or well-intended friends. Laws differ from state to state, and all families and circumstances are different. The internet and friends won’t take all this into account, but a legal expert who understands you, your wishes, and your family dynamics will.
Work with a Lawyer Who Focuses on Estate Planning: Establishing the right plan for each family is a personal process, and a lawyer specializing in Wills and Trusts will bring specific expertise to the table. What works for one family might not work for yours. A trusted, heart-centered attorney who will appreciate your unique situation and educate you so you’re empowered to put the right plan in place is priceless.
I Can Help.
If you are trying to decide whether the many benefits of using trust-based estate planning will work for you and your family, set up an appointment with me. Let’s design a plan that will provide the maximum benefit for the people you love most while paying the least amount of taxes possible. We want every client to have the right solution in place and ensure it will work when needed most.
