Wills and Trusts Are Important For Blended Families

If you are in a second marriage and you or your spouse have children from a former relationship, it can be vitally important to your family’s well-being to put an estate plan in place.

Estate planning involves anticipating and planning for what may happen in the world of “what if”. In the world of “what if”, all the things that you hope won’t happen, can happen. For example, in a blended family situation, we can have the two spouses and children from either spouse’s former relationship. If the traditional fallback plan of each spouse leaving their estate to the other one and upon the survivor’s death, the estate going to the children is put in place, the children from a former relationship can be accidentally cut out of their inheritance.

The children can be accidentally cut out of their inheritance if for instance, husband dies and wife inherits the estate. Wife inherits the estate with the intention of carrying out husband’s wish that upon her death, his children (her step-children) will receive the inheritance he believes they will receive when she dies, just as they planned. However, wife remarries. Now there is a new spouse in the picture and the inheritance for the step-children can become lost in the real world of moving on and blending assets with a new spouse.

Husband could have insured that his children would receive the inheritance he intended and taken care of his wife as well by setting up an estate plan that included a special type of trust. This trust could have paid income to the wife to help her meet her living expenses and preserved the principal for the children to receive upon wife’s death. Husband could have even set it up so that wife could access some of the principal if she needed it for specified reasons or in specified amounts. This type of planning choice takes care of all the family members and proactively plans for the world of “what if”.

Everyone has a need for an estate plan in order to make sure that their wishes are communicated and carried out but as illustrated above, this becomes a vitally important step for members of a blended family.