Blended Families and Estate Planning

A blended family can be a blessing. However, it does mean you have to take special care with your estate plan — although you want to take care of your spouse and stepchildren, you do not want to inadvertently cut out your biological children. Take the following steps:

• Check your beneficiaries. Who is the beneficiary of your 401(k) or IRA? This overrides your Will, so it’s important to ensure it is updated.
• Update health care directives, including your health care representative, making sure it’s the correct person who is in charge of making medical decisions in case you become incapacitated. It may be your current spouse, a child or step-child. When a family is blended, some members may feel hurt or resentful, so choose someone who’s level-headed and able to get along with all family members. Make your intentions public in advance so there’s minimal squabbling upon your death.
• Review your will. Often, a Will in a blended family is designed to give the surviving spouse the assets upon death, and then, upon the surviving spouse’s death, give the remaining assets to all the children. This requires good faith among all parties. A contract can require a spouse to maintain a Will, but such contracts are not always recognized. Work with an attorney: Trusts may help direct the money to the proper recipients.
• Take stock of family items. No matter how well everyone gets along, there may be strong sentimental attachments to Grandpa’s war medals or Grandma’s necklace, even though they may have little monetary value. A codicil to your Will or a letter of instruction to your executor can see that these remain in the family.
• Consider what is “fair treatment.” You and your spouse may not have been financial equals when you married. Your new spouse may have moved into your house, but you may want your children, rather than your spouse’s children, to get the proceeds should the house be sold. If you brought more assets to the marriage, you may want more to go to your heirs than to your spouse’s. At the same time, you may want to provide for your spouse by establishing a trust and specifying that when your spouse passes, the trust is distributed among all the children.
• Think about gifts now. Not only will you get the pleasure of seeing your family use the money, but you will be also assured they receive the assets you want them to. (Of course, keep on top of gift tax rules.)
• Life Insurance. Consider naming biological children as beneficiaries of life insurance.  This ensures that they receive an inheritance upon your death without disrupting the assets left for your spouse.

Ex-spouses, blended families and commingled assets definitely raise the complexity quotient. It’s been estimated that more than half of all Americans have been or will be included in a blended family during their lifetimes. A key to minimizing stress on your heirs and family members is a well-thought-out estate plan that honors your spouse and provides an inheritance that protects your own children.

Do you have questions?

Count on your experienced team at Ericson, Scalise & Mangan, PC to provide you with sound guidance for your Estate Planning, Elder Law, Real Estate, Probate, Trust & Estate Administration, and other legal needs. For assistance, contact us today at (860)854-3809, or email us at info@esmlaw.com.