Estate Planning for Blended Families

As of 2016, blended families outnumbered traditional families in the United States. In fact, the very definition of what constitutes a family has expanded so exponentially that we may wonder what a “traditional” family even looks like anymore. For our purposes in this article, a blended family is one wherein at least one spouse has previously been married. We will also focus on those spouses who bring children of their own to a new marriage.

Blended families are increasing in number due to several factors. Higher divorce rates mean there are more opportunities for single parents to remarry someone who may potentially also be a single parent. Although rising divorce rates may seem like a bad thing, the good news is that less people are staying in unhappy marriages – choosing instead to strive for happiness, which ultimately should have a positive effect on any children in the family.

With the expanded definition of what makes up a family in today’s society, any number of homes contain a new mixture of children – both hers, his, and “theirs.” Additionally, more and more divorces are amicable, with ex-spouses remaining friendly in order to co-parent. With the addition of a step-parent into the equation, the ex-spouse may wonder if their biological child(ren) will continue to be provided for in the other parent’s will.

Estate planning becomes more challenging with the addition of more family members, regardless of how happy everyone is at the time of the wedding. The hard truth about estate planning for blended (or “step”) families is that planning for the well-being of two sets of children can easily escalate into an argument between the new spouses.

It’s critical to remind clients who have recently become part of a blended family to make sure that they make the necessary changes to the beneficiaries listed on their insurance policies and retirement accounts. No matter what a will says, the named beneficiary will take precedence over the will. Failure to remove a former spouse as beneficiary can prove quickly disastrous to a new marriage. Arguments aside, if you pass away while your ex-spouse is still named as beneficiary on your retirement account(s), guess who’s going to get all of that money?

In order to ensure that you’re not missing any crucial components of a solid estate plan after you’ve grown into a blended family, you’ll need to work with a New Jersey attorney who has significant experience working with complex estate plans. Your attorney will be able to advise you on:

  • Reciprocal wills (and how they can be problematic for blended families)
  • Non-reciprocal wills
  • Life insurance in addition to a will to provide for everyone in question
  • Testamentary trusts
  • QTIP trusts
  • Pre-marital agreements
  • Health care power of attorney
  • Living wills
  • Support obligations
  • Real property

The ultimate goal when working to set up an estate plan as a blended family is open communication between everyone involved. By maintaining open conversations about the details of your estate plan, no one will be left with an unexpected outcome.

 

Image: “Mike & Carla’s Wedding” by Jason Meredith – licensed under CC by 2.0

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