The estate planning goal of ensuring that natural children (and grandchildren) receive their inheritance becomes more challenging in a blended family situation. Other special estate planning concerns warrant consideration for a blended family.
Many people think of a blended family being like the famous, fictional Brady Bunch — a married couple raising children from previous marriages of both spouses. A blended family that includes only one spouse with children from a prior marriage is even more common.
Blended families also affect estate planning when they occur in other ways that are common but do not come to mind as quickly. For example, if an adult child marries a spouse with children from a previous marriage, or an adult child has a second (or subsequent) marriage and children from a previous marriage, those blended families should factor into the estate planning decisions of the parent(s) of the adult child (to protect the interests of the adult child and grandchildren), as well as the estate planning decisions of the adult child.
In other words, blended families may occur in several different ways that affect estate planning. A family with both biological (or adopted) children and stepchildren in any generation requires special attention as a blended family for estate planning purposes. For many individuals, a paramount goal of estate planning is protecting the financial legacy of children and grandchildren. A blended family complicates creating an estate plan to accomplish that goal.
A blended family becomes a factor in estate planning after a remarriage at any stage of life. The spouses may have a young family, or the second marriage may occur later in life. A late-life remarriage gives rise to special blended family issues that should be factored into estate planning decisions, just as remarriages of young adults do.
If you have a blended family and pass away without a valid or complete estate plan in place, the Arizona laws of intestate succession determine the distribution of your estate. Your heirs under those laws do not include stepchildren unless they were legally adopted. They also favor your surviving spouse over your natural and adopted children.
In addition, the reality is that after a child’s natural parent passes away, disinheritance by a stepparent is not uncommon. It may occur immediately, after the passage of time as the relationship weakens, or after the stepparent remarries.
Every situation involving a blended family is unique for estate planning purposes, just as each estate plan is as unique as the individual who creates it. Several aspects of planning take on special meaning in a blended family situation:
A carefully drafted estate plan puts legal safeguards in place that protect all the members of your blended family and make certain your wishes take effect, regardless of what might happen in the future. While a specific blended family is unlikely to encounter all of the concerns listed above, a thorough estate plan ensures that legal protections are in place in the event they do occur.
No single estate plan formula is appropriate for every blended family. However, there are general principles that every blended family estate plan takes into account.
First — and extremely importantly — a Last Will and Testament generally is inadequate to provide protection for spouses and children (and grandchildren) in a blended family situation. An estate plan for an individual with a blended family likely will include a trust to protect assets and ensure that the assets reach the intended beneficiaries.
A trust offers a number of advantages over a will. In addition to avoiding probate and maintaining the privacy of financial details, a trust provides the means to control management and distribution of estate property after death — which is especially critical in a blended family. The appropriate type of trust and the terms for management and distribution of the assets depend on the individual’s and family’s circumstances.
An estate plan for a blended family may use other means of protecting assets and children’s inheritances in addition to a trust. The plan also will include other documents as, like durable powers of attorney, carefully drafted to address concerns about who will have authority to act if the individual creating the plan becomes temporarily or permanently incapacitated.
Non-probate assets, like bank and brokerage accounts, retirement accounts, life insurance, and real estate, need to be reviewed as part of a blended family estate plan. Titles to property and beneficiary designations must be consistent with the goals and structure of the estate plan. (This step of the process also ensures that a former spouse is no longer designated anywhere as a beneficiary.)
Finally, any individually-owned property that may be subject to probate also must be addressed in the estate plan, either in the will or in a trust. Since Arizona is a community property state, the estate plan also must take into account issues relating to separate property of the spouses (including property owned prior to the remarriage), as well as the community property rights of a surviving spouse.
Estate planning for a blended family requires assistance from a knowledgeable estate planning attorney who is experienced in addressing the special considerations that arise in a blended family. An individual whose estate includes a blended family should never attempt to create an estate plan without the help of a lawyer. Doing so would be a serious mistake with the potential for disastrous consequences.
The important first step toward creating a thorough estate plan to protect your blended family is communicating candidly with your spouse. While it may not be the easiest conversation to have, you and your spouse should develop a mutual understanding of your personal and financial goals and wishes, both short-term and long-term. If you have difficulty even beginning the conversation, an estate planning attorney experienced in working with blended families can help you get started.
Your attorney will explain what your estate plan will accomplish and discuss options that take into account all the necessary considerations for protecting all the members of your family and your assets. Your lawyer navigates through the process with you step-by-step, putting all the pieces in place to fulfill your goals. When your estate plan is finished, you achieve peace of mind knowing that you have taken the right steps to take care of your spouse and your children, or your adult child and grandchildren, during your lifetime and after you pass away.
At Peterson Law Offices, wills and estate planning are a focus of our practice, including estate plans for individuals with a blended family. Attorney Shane Peterson takes great pride in providing high-quality services at affordable prices to clients throughout the East Valley, including Queen Creek, San Tan Valley, Gilbert, Mesa, and Chandler. You may schedule your free initial consultation by calling 480-878-5998 or using our online contact form.
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