As an Estate Planning Attorney, it is common for me to have to address the issues that arise when dealing with blended families. Blended families have unique circumstances that require careful thought, consideration, and planning. For these reasons, it becomes very important to make certain that you have a proper estate plan in place if you are in a blended family.
Typically in a blended family there are competing interests. A spouse will need to decide whether they leave their assets to their new spouse or whether they leave their assets to their biological children. In making this decision there are basically three options.
For illustration purposes, let’s assume that the Husband has remarried and has two minor children to a previous marriage.
With this option, Husband sets up a simple Will which leaves all of the assets to his current spouse if she is alive and, if not, to his children in equal shares. At the same time, the new spouse sets up a similar Will. This is a very simple method and is relatively inexpensive to set up.
The down side of this method is that the new spouse, after the death of her husband, can change her Will, effectively disinheriting the children of the deceased husband. In addition to changing her Will, the new spouse can also simply spend all of the assets from her husband’s estate thus leaving nothing for the minor children of the Husband.
With this option, the Husband could consider setting up a Trust for the minor children. In this example, the Husband in his Will would set up a Trust which would hold assets for his minor children.
These assets are typically held for the children but not distributed to them until such time as his current spouse passes away. Generally these funds are made available to the current spouse during her lifetime and restrictions can be placed on the amount of money that can be distributed to her from the Trust. Upon the passing of current spouse, the balance of the Trust is then distributed to the minor children.
This method is a little more expensive to set up but it does guarantee that if there are assets left in the trust they will be distributed to the minor children. The one downside to this method is that these funds are generally not available for the current spouse for her unconditional use. Generally there are conditions placed on how much can be turned over to the current spouse.
Finally the third option is merely a combination of the two options referenced above. It is quite common in a blended family situation to have the Husband set up a Will that distributes some of the assets directly to his current spouse and other assets to be placed into a trust for his minor children.
It is very important if you are in a blended family to make certain that you give thought and consideration as to how you would want your assets to be distributed in the event of your passing. It is also important to make certain that you implement a plan that accomplishes those goals.
You must remember, that if you do not have a plan in place the State of Pennsylvania will dictate where, when and how your assets will be distributed.
If you are interested in scheduling an appointment to discuss estate planning for your blended family, or to prepare estate planning documents, please contact our office at 724-836-3300 or complete our easy-to-use contact form today.