Blended families are becoming increasingly common, but they often bring with them unique challenges, especially when it comes to estate planning and dealing with the intentions of heirs and a parent’s intentions. One of the biggest problems arises when one of the spouses dies and leaves everything to the other. When the surviving spouse dies, the money often goes to the stepchildren, leaving the step-siblings out.
In a recent article in the Wall Street Journal The Brady Bunch Breaks Down: Estate Fights Tear Stepfamilies Apart it can be difficult for families to navigate these challenges.
This can also be a source of great conflict and resentment. The step-siblings may feel that they have been unfairly excluded from their parents’ inheritance, while the stepchildren may feel that they are entitled to the money because they are the ones who cared for the surviving spouse.
In some cases, this conflict can often lead to legal battles. Step-siblings may sue their step- parents or step-siblings in an attempt to get their share of the inheritance. These cases can be very costly and time-consuming, and they can often damage the relationships between the family members involved causing lasting issues that frankly could have been avoided.
There is no easy solution to this problem, except to plan for the worst case. However, there are a few things that can be done to help avoid conflict. One is to have a clear estate plan that states who will inherit the money and how it will be divided in a way that is set up and documented.
One of the families featured in the article, Barbara and James Kurtz established a joint trust in 1995, To give equal amounts of what remained in the trust after the surviving spouse died. Recently the children filed a lawsuit against the estate after Barbara died. James had filtered all the money after her death into a new trust which named his son as the sole beneficiary. When Barbara’s children found out they were to not to inherit anything they filed a lawsuit. They charged that James could not rewrite trust after Barbara’s death. A trial is scheduled this summer.
Estate planners often advise that individual trusts be set up for children outside the estate plan. It can better protect them. Another option is to give money to your children while you are alive and then split up what remains in the estate plan.
In addition to estate plans and trusts, a prenuptial agreement is especially important. One of the things you can specify is that your separate property goes to your respective children when you die.
Patricia Schultz and her husband James had a blended family with a total of 8 children, In their first will, the inheritance went to the surviving spouse and upon their death the inheritance would be split among the children. But then Schultz’s father told Patricia and her sister that he had proceeds from selling a construction business and that he was leaving it to them as a nest egg
but after his death he wanted this money to be passed down through the bloodline. It was not any easy conversation for Particia; she set up a trust and was appointed trustee. This money would be inherited by her children only. Being named a Trustee was extremely awkward for her.
Issues like this can frequently arise for blended families and these family units even have a greater need for Estate Planning. If you have a blended family and would like to speak with an Estate Planning attorney then contact Attorney Edward L. Amaral, Jr. at Amaral & Associates P.C. about your options including how you can set up your estate plan to avoid conflict and deal with unforeseen issues. Please call us today at (617)-539-1010 ext. 111 or email Attorney Edward L. Amaral, Jr. at edamaral@amarallaw.com.
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