In many cases, couples bring children into a marriage from a prior marriage or union and then have children together. This is often referred to as a blended family. Blended families highlight the need for careful estate planning to make sure the needs of each spouse are met, as well as the needs of each parents’ children.
If one spouse is significantly younger, this sometimes means that the older spouse’s children are close in age to the younger spouse. There can also be sibling rivalry between children of a parent and step-children. These relationships can cause more than friction between the step-parent and step-children.
Most parents want bloodline protection to ensure that their assets will pass to their children and/or grandchildren, and maybe not their stepchildren. However, without careful estate planning, there is no guarantee that their children will inherit their assets. In fact, if the couple creates identical wills or a basic probate avoidance joint revocable living trust that provides that all of their assets pass to the survivor of them without restrictions, then there is a significant increase in the likelihood their children could be disinherited. A will or basic probate avoidance joint revocable living trust can be changed at any time by the surviving spouse.
This risk can be mitigated or eliminated with careful planning such as the creation of an “A/B” living trust that protects the wishes of the first to die and ensures bloodline protection. An A/B trust can allow a spouse/parent to “rule from the grave.” At the death of the first spouse half of the trust assets can be locked down. With this type of planning, each spouse can have the assurance that their share of the trust assets (or one half) will pass to their children, grandchildren or any other person they wish. The remaining assets are used for the surviving spouse, and will then pass as that spouse wishes.
The are pros and cons to an A/B Trust. It is imperative that you consult with a qualified estate planning attorney before considering an A/B Trust.
Another common trap in blended family planning is for each spouse to name the other as a beneficiary on accounts or as a joint tenant on real property. Doing so will not allow the bank account, piece of property or other type of asset to pass to anyone else because of the build in right of survivorship, regardless of what their estate planning documents provide.
We help families of all types plan so that their savings, home and other property passes the way they intend. This involves getting to know you and your family and having a complete understanding of each spouse’s wishes. If you’d like to discuss your particular situation, please give us a call. Contact us today at 833-677-3737 or schedule a free consultation to discuss your legal matters.
Thanks for reading.
Christopher E. Botti, Esq., Chief Preservation Officer and Certified Specialist in Estate Planning, Trust and Probate Law
