Due to rising divorce rates over the last decade, blended families are a common family structure. According to U.S. statistics, 50% of marriages end in divorce, and 43% of new marriages are second marriages for at least one spouse. Every year, one million children end up with newly divorced or divorcing parents. Estate planning for blended families creates a new set of rules for complicated family structures:
- Married couples where one or both spouses have children from a previous marriage
- Families with children who are in second marriages and have other children from first marriages
- Families with children whose spouses have children from previous marriages
With these complex blended family structures, families often need the advice of an estate planning attorney who can resolve financial conflicts that arise between spouses, children and other family members. Adults in most blended families want to provide for their new spouse, as well as their children from new and previous marriages. Without proper planning, estate challenges often lead to problems.
- Disinheritance for children
- Delayed inheritance for children until their parent’s new spouse dies
- Protection of assets belonging to former spouses
- Disputes over designated responsibility or authority of family members
- Disputes over the division of family assets
Estate Planning Strategies
Proper estate planning is essential to protect the assets of blended families. An estate planning attorney can choose and execute the right estate planning strategies that will protect assets and family members.
- Premarital and Marital Agreements – Legal agreements can protect a spouse’s rights and responsibilities for living arrangements and family expenses, dictate rights and obligations in a divorce, and protect finances for a surviving spouse.
- Wills – Simple wills must be carefully executed to protect all parties in a blended family. Specifics regarding beneficiaries of all assets including property, bank accounts, savings, and retirement funds must be assigned to avoid contested wills.
- Trusts – Setting up a trust through an estate planning attorney can allow one spouse to provide for the surviving spouse, and ensure that his or her children will inherit upon the death of the surviving spouse. A trust can also allow for certain assets to be allocated to children immediately following a parent’s death, avoiding delayed inheritance problems.