The birth of a child, a soldier's welcome home, a wedding, a graduation, holiday festivities, or even a birthday party are all examples of gatherings where, more often than not, a blended family is present, taking part and celebrating. In the U.S., first marriages, second marriages and remarriages regularly welcome new family members. Plus, people are generally living longer, often outliving spouses and marrying again. Step children, step parents, children from previous marriages are all members of the different types of blended families that now outnumber "traditional" families in the United States. And if you are a member of a blended family, as it grows and changes, new estate planning considerations arise regarding your own children and family members, as well as members of your blended family.
Avoiding Possible Problems
Often, in many family situations, one of the best ways to avoid potential problems is to talk with family members about your concerns. As a recent USA Today article discusses, communication is critical in estate planning, particularly when a blended family is involved. Frequently when a family member passes, the remaining family members aren't just concerned with the transfer of money, they are also concerned with the transfer of special heirlooms and other unique items. Talking about, and planning for the future transfer of not just monetary assets but personal assets as well will hopefully avoid potential problems and disagreements.
For example, one possible blended family pitfall is leaving an ex-spouse in your estate planning documents. If your marriage status changes, and you already have an estate plan in place, there are several things that you need to consider changing in your plan to avoid possible problems later. It may be wise, if you no longer wish for your former spouse to have a share in your inheritance, to change your estate plan. You may want to revise your plans, including but not limited to your will, your life insurance policies and your retirement plans, so that your former spouse no longer has any share in your assets or wealth. You may also want to rethink your beneficiary designations on different policies, to accommodate your changing family dynamic.
Another option to think about is designating different assets in different kinds of trusts. By putting assets into certain kinds of trusts, a grantor can detail exactly how the assets are transferred. Often, using a trust in estate planning can be a useful way to avoid potential problems by specifically indicating how certain assets will be shared and how assets will be controlled.
As you can imagine, blended families often add much joy to an extended family. But, in many cases, a blended family can also provide challenges for estate planning. With careful considerations, planning, and communication to family members regarding your intentions, the circumstances of any blended family can be managed in any estate plan.