Yours, Mine, Ours!

Remarriage rates after divorce are over 75%.  As a result, blended families are simply part of the fabric of our culture.  Each spouse may bring children from a prior relationship.  The blended couple may have their own biological children.  The new blended family may appear as the Brady Bunch with all kids of the same age or there may be vast age differences between the children. 

While all circumstances are unique, by and large, the estate planning goals of blended families remain fairly consistent: 1) provide for the surviving spouse; 2) provide for the children; and 3) preserve the estate for the children and their descendants.  There may (does) exist inherent tension or conflict among these goals.  Proper estate planning tackles these issues directly; establishes a structure to achieve each of these goals; provides clarity and certainty for all; and reduces the potential for future conflicts.

The process begins with careful listening to, and exploring, the expressed desires and goals of couples in a blended family.  One spouse may place greater emphasis on preservation of assets for children of prior marriages.  One spouse may want to ensure that the surviving spouse’s needs will always take priority.  One spouse may desire that the biological children of the blended couple come first.  A candid, and perhaps even difficult, discussion is necessary to understand the goals, blended family dynamics, and potential future conflicts. 

Assets can be held and managed in living trusts allowing for distributions to the surviving spouse or children while still providing creditor protections, asset protections and wealth preservation.  For example, the blended couple may agree that certain assets should be “locked up” in trust for the children, but could still be used by the surviving spouse for emergency situations.  Similarly, assets can be used to ensure minimum distributions to loved ones.  A life insurance policy could designate the children of one spouse as beneficiaries thereby providing an amount certain for those beneficiaries.  401(k) plans can be utilized in a similar fashion.  However, care must be taken in this approach as those assets may become subject to creditors of the designated beneficiaries.

As importantly, structures may be established to lessen or eliminate future entanglements between the surviving spouse and stepchildren, or among the different families brought together in the blended family.  Professional and independent trustees may be used.  Separate trusts may be established to hold the assets of each spouse so that the separate families need not involve each other with estate administration.

Numerous methods remain readily available to accomplish the oft-times complex goals in the blended family situation.  It all starts with the honest discussion and evaluation and prioritization of those goals.  Contact Michael at Geiger Law for assistance with all your estate planning needs, including assistance with your own Brady Bunch.