In unions of those who marry twice, about 65 percent include children from prior marriages, according to the National Stepfamily Resource Center. That can complicate the transfer of brokerage accounts, real estate and personal possessions. Throw in resentments over divorces and rifts between stepchildren and step-parents, and the situation is ripe for legal battles.
If you have a blended family, you'll need to tread carefully when it comes to your estate planning.
When a parent with adult children remarries, it is often difficult to devise an estate plan that pleases both the new spouse and the children. Both the new spouse and the children can easily feel slighted. This is particularly true if there is other tension between them such as bitterness over the marriage itself.
This has led to a lot of fighting over estates.
Recently, Bloomberg published a list of ways to help minimize the chances of these fights in an article titled "Ways That Blended Families Can Avoid Bitterness."
The Bloomberg list includes:
- Focus on Fairness - An estate plan needs to be fair to both the new spouse and the children from the previous marriage. Neither should feel they have been cheated out of a rightful inheritance. Look for ways to provide for the spouse while at the same time ensuring that the children receive a timely inheritance.
- Trust in Trusts - Trusts can be an excellent way to ensure a steady stream of income for the spouse, while leaving the remainder to the children after the spouse passes away. However, if the children and the spouse are close together in age, it might be necessary to ensure that the children receive some of the income from the trust more quickly.
- Keep Documents Updated - When you get remarried make sure the beneficiaries on retirement accounts and life insurance accounts are up to date.
If you have any questions about minimizing conflicts over your estate in your blended family, schedule an appointment with an experienced estate planning attorney.
Reference: Bloomberg (November 10, 2014) "Ways That Blended Families Can Avoid a Wealth of Bitterness"