Estate Planning: What About Blended Families?

While everyone should do estate planning, those with blended families have additional issues to consider.

Blended families can involve children from a prior marriage as well as joint children, sometimes jokingly referred to as “his, hers and theirs.” And blended families are changing dynamically — from both younger and older couples, and nearly everyone in between.

When the new spouse is significantly younger, this sometimes means that the older spouse’s children are close in age to their parent’s new spouse. The older spouse’s children ask:  Are they going to have to wait until the younger spouse dies to inherit from their parent?  By the time the younger spouse dies, will there be any assets left to inherit?

Most parents want to ensure their assets will pass to their children, not their stepchildren. But can they rest assured their assets will go straight to their children? When good estate planning is absent, there is no guarantee their children will inherit their assets. In fact, if the couple creates common “I love you” wills, their assets will pass to the survivor of them to do with as he or she pleases. The surviving spouse may then leave the assets to his or her children, totally excluding the stepchildren, who then receive nothing.

Even beyond leaving the assets to their children, many parents give a higher value to the children of their happy marriage, over the children of marriages that ended in divorce.  Recently, one of my clients left 40% to the child of his current happy marriage and only 20% to each of his three children of his previous unhappy marriage.

The fact that Americans are living longer, and sometimes remarrying much later in life, means that blended family issues come into play there too. A recent USA Today article, titled “With more blended families, estate planning gets ugly,” highlights some of these issues.

As this article states, “add the gaping generational divide between Depression-era parents, who valued frugality above all else, and their baby boomer children, who relish self-reward, and the dynamics can be explosive.”

Baby boomer children expecting an inheritance may have to wait much longer than expected. But perhaps more difficult, who should pay for the cost of the surviving spouse’s care? Should the stepchildren be forced to use what they consider to be their inheritance to pay for an aging stepparent’s care, particularly after only a short-term marriage? Or should this burden fall on the children and not the stepchildren?

There is no one right answer here, but these questions epitomize the many questions that arise with blended families. Estate planning and communication with all parties involved is essential.  Otherwise, when the parents die, there are many unhappy children and stepchildren.

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