Roughly one in three Americans is now part of a blended family, and over 40% of marriages in the United States involve a spouse who has been married before. While blended families may create strong bonds between people who are not related by blood, they can also complicate relationships. Those relationships can become even more strained when a family member dies and there is confusion or a dispute over an estate.
Why Estate Planning is Essential for Blended Families
All adults need an estate plan, but if you have a blended family, it’s even more critical. It’s not just about protecting assets; it’s about protecting the people you love. Here are some of the reasons you need an estate plan if you are in a blended family:
To Prevent Conflict Between Stepchildren and a Stepparent
Most people who create an estate plan do so to protect the people they love. Sometimes those people’s interests are at odds with each other—such as when the deceased’s spouse and their children from a prior relationship both think they should inherit the bulk of the decedent’s estate. That can happen even when adult children and a stepparent have had a cordial relationship, and it’s common when the relationship has been a tense or distant one.
Making decisions about your estate when you are in a blended family can be stressful. Unfortunately, failing to plan doesn’t eliminate the pain; it simply shifts it to the people you care about. The conflict and confusion that ensue may permanently destroy relationships.
To Avoid Unintended Consequences of Intestacy Law
Every state has its own law of intestate succession that dictates how a decedent’s property will be distributed if they do not have a valid estate plan. These intestacy laws are designed to approximate how most people would distribute their estates if they had created an estate plan. However, most of these laws were designed primarily with a “traditional” family in mind and may not work as well for blended families.
For example, in Michigan, a surviving spouse would take the first $100,000 of their deceased spouse’s intestate estate, plus ½ of the remainder of the estate if none of the surviving children were also children of the surviving spouse. Depending on the size of the estate, that could mean that a relatively short-term spouse inherits the great majority of the estate, with the adult children of the deceased receiving little. The surviving spouse can then leave assets they inherited to their own children. This is only one of many possible scenarios in which failure to make an estate plan can result in unintended consequences.
The bottom line is this: if you want your estate distributed according to your wishes, not state law, make an estate plan that clearly outlines your intentions.
Incapacity Planning
Estate planning isn’t just about what happens to your property after your death. It’s also about who makes important decisions for you if you become incapacitated during your lifetime, such as by dementia. It is impossible to overstate the importance of incapacity planning. Creating a financial power of attorney and patient advocate designation for healthcare allows you to appoint a person you trust to take care of your financial and medical decisions if needed.
If you do not have powers of attorney and advance directives in place, your family could end up in probate litigation fighting about who has the right to make your decisions—when they should be focused on your care. By creating an incapacity plan, you avoid litigation and the need to have a guardian or conservator appointed for you.
Estate Planning Options for Blended Families
The consequences of failing to make an estate plan for your blended family can be severe. Fortunately, they are also simple to avoid. You just need to take the first step and contact an estate planning attorney who has experience working with blended families. After discussing your goals and concerns with you, some of the estate planning tools your attorney may recommend include the following:
Prenuptial or Postnuptial Agreement
The best time to start estate planning for a blended family is before the family is blended—with a prenuptial agreement. Prenups aren’t just about planning for a possible divorce; they can also minimize disputes by clarifying ownership of assets and protecting the inheritance rights of children from a prior relationship as well as providing for the support of a surviving spouse.
If you did not create a prenuptial agreement before your marriage, you can achieve the same results by making a postnuptial (after marriage) agreement. A prenup or postnup can be used in conjunction with a will or trust.
Last Will and Testament
A last will and testament, commonly called a will, is the basic building block of many estates. A will allows you to name a guardian for any minor children in the event of your death, as well as to leave specific bequests to people who might not otherwise inherit from you under state law, like stepchildren. Assets distributed through a valid will go through the probate process.
Living Trusts
Unlike a will, assets held in a trust do not go through probate. A trust can provide flexibility for blended families, enabling the creator of the trust to provide for the needs of a surviving spouse while also protecting the inheritance of children from a previous marriage or relationship. A trust with clearly-stated terms can provide clarity for a grieving family, helping them avoid disputes over the distribution of assets.
Patient Advocate Designations and Durable Power of Attorneys
As mentioned above, these documents allow a person to appoint an agent to make decisions on their behalf if they become legally incapacitated, reducing the risk of blended family conflict.
These are just a few of the most common tools that can be used to plan for your blended family. An attorney can help you identify other options based on your unique needs.
Work with an Experienced Estate Planning Attorney
The knowledgeable estate planning attorneys at Barron, Rosenberg, Mayoras & Mayoras work with blended families who need an estate plan customized to their needs, including prenuptial or postnuptial agreements. Schedule a consultation today by calling (248) 641-7070 in Michigan or (941) 222-2199 in Florida to learn how we can assist you. You can also use our simple online contact form.