Recommendations for a Blended Family
Blended families and inheritance is a volatile mix. But wise planning can defuse the situation.
Here’s the quandary: If spouses in a blended family use a typical Simple Will for their estate planning, the children’s inheritance can be jeopardized.
With the usual Simple Will, each spouse leaves everything to the other spouse at death. That means that the spouse that lives longer ends up owning everything that both spouses brought to the marriage.
But what if that surviving spouse then turns around and creates a new Will that leaves everything only to his or her own biological children? In that case, the children of the spouse who died first will end up without an inheritance.
So, what can be done to prevent this turn of events? The easy answer is for the spouses to create a joint Family Trust. Under the trust, you will agree that all of the assets that either of you brought to the marriage are to be placed into the trust. When one of you passes away, everything will continue to be available to provide for the financial needs of the surviving spouse.
But then when the second spouse passes, all remaining assets will be divided between the children of both spouses. Usually half of the assets are divided between the children of each spouse.
In this arrangement, you agree that no additional changes to the trust can be made after the first spouse passes away. In this manner, everyone can relax knowing that the inheritance will be shared by all of the children.
So, if you are part of a blended family, you should take a careful look at the Family Trust option.