Estate Planning for Blended Families: Protecting Those You Love

Question:  Are there unique estate and succession planning considerations when working with blended families?

Answer:  Yes. Estate planning for blended families involves considerations that traditional plans often overlook.

According to the Merriam-Webster Dictionary, a “blended family” is a family including children from a previous marriage of one or both spouses.

This arrangement is very prevalent in the U.S. today. According to Pew Research Center, about 17% of U.S. children (roughly 1 in 6) live in a blended family which includes a stepparent, stepsibling, or half-sibling.

These types of families present very unique challenges for estate and succession planning. As such, there is no “one-size-fits-all” approach to addressing the same. Each situation must be evaluated on the specific facts and circumstances present to determine how best to approach such planning.

For instance, in the case where family members are contentious it might be best to fund an Irrevocable Trust and have Joint & Mutual Wills to deter a spouse from diverting estate assets away from biological children of the deceased and over to stepchildren.

Whereas, in another case it may be safe to rely on TOD and POD beneficiary designations. Yet in another scenario it might be necessary to transfer assets as outright gifts prior to death to be certain that the assets end up where they are intended.

Each of these scenarios have their own positives and negatives. Endless other scenarios exist beyond the scope of this response. However, what is clear is that it is critical for spouses with blended families to honestly and openly discuss and plan for the possibilities of subsequent marriages, death, divorce, and other life altering events. To do otherwise results in strained family relationships, misunderstandings, family conflict, and invites costly litigation.