Families where at least one parent was previously married can offer unique challenges when creating or updating an estate plan. Not only can financial issues become more sophisticated, but there may also be challenges in determining how to divide assets that have a strong emotional component, such as a vacation home, a family business, a work of art, or a collection.
Some couples carefully keep their assets separated to reduce the complexity of the estate. However, this may not be realistic if the marriage is a long one and/or includes adopting stepchildren or having more children. Even if there are no additional children added by a subsequent marriage, the spouse at the time of death may legally assume control of the grantor’s estate. If there are no arrangements in place, this can place bias in favor of the final spouse over other family members.
The best course of action
The grantor should determine a course of action ahead of time. This includes a binding estate plan with a will and other essential arrangements so the blended family can focus on grieving instead of arguing over control of the estate’s assets. Tips for creating a thoughtful estate plan include:
- Do not use a simple will: Like it or not, blended families are more complex, and a spouse may have different goals or priorities than taking care of family members from previous marriages. This can be especially problematic if there is a business or assets associated with an earlier marriage.
- Trusts may be the best option: Not only can this keep at least some assets out of probate, but the grantor can design a trust that provides for a spouse while also addressing the needs of children from previous marriages.
- Pick the right trustee: A complicated trust demands ongoing work by someone who understands finances and the running of the trust. It is also helpful if they are neutral and can avoid the appearance of bias in decision making and resolving disputes.
- Power of attorney: A person with medical power of attorney carries out the predetermined wishes for medical care in case of the grantor’s incapacitation. If there is no trust, a person with the financial power of attorney can manage the economic interests of the grantor’s estate.
- Plan for remarriage: The surviving spouse may wish to remarry, which can further put family-based assets at risk. The estate plan should address this.
- Move some assets to children: This can reduce resentment towards a stepparent, or officially shift control of a family business to those who will run it.
These tips avoid unnecessary conflict
The death of a parent can leave families adrift. There can also be an unwelcome shift in the family dynamic where insecurity, alienation, and insensitive comments or actions lead to disputes or even litigation. This can even occur when families believe they are doing the right thing to honor the grantor. Working with an experienced estate law attorney often avoids unnecessary conflicts and allows the family to move forward with a clear understanding of the grantor’s wishes.
