Challenges a Blended Family May Face in Estate Planning
Remarriage following a divorce often creates a blended family that includes children from a previous marriage of one or both spouses. The new spouses may add their own children to the family as well. Regardless of the composition, the circumstances of a blended family give rise to special concerns, as parents in every blended family know. Yet many spouses are not fully aware of the unique challenges a blended family may face in estate planning.
Inheritance issues for blended families can be resolved by thoughtful, careful estate planning carried out with assistance from an experienced estate planning attorney. Our attorneys at Asset Protection of Georgia frequently help clients with blended families find solutions that address estate planning concerns. In the following discussion, we highlight some of the issues that arise in estate planning for blended families.
Children in a Blended Family
Taking care of a surviving spouse is an important estate planning goal for most married couples. When the spouses have children, another foremost concern is taking care of the children if something should happen to a parent. In a blended family, the differing legal relationships between the parents and children is one of the primary reasons that complicated estate planning issues arise.
Children in a blended family can have one of several different legal relationships to the spouses and other children in the marriage. If a child has a biological (or adoptive) parent outside the marriage, the child is the stepchild of the spouse who is the non-biological parent, unless that parent adopts the child. Only a biological or adopted child is a child of a parent for legal purposes.
In Georgia (and many other states), a stepchild has no legal right to inherit from a stepparent. A natural or adopted child has a legal right to inherit only if a biological or adoptive parent dies intestate without a will or estate plan. Stepchildren, as well as natural and adopted children, can be disinherited in a valid will or estate plan. On account of the legal rules that apply to children in the context of inheritance, a parent in a blended family must take a careful approach to estate planning, if the parent wishes to ensure that their children have financial security in the future.
Property Distribution in an Estate
Gifts of property and assets made in a last will and testament go outright to the beneficiary. When the estate completes administration and probate, the beneficiary immediately receives full control of the property.
Assets with named individual beneficiaries, such as retirement accounts and life insurance policies, do not go through the estate or probate but are also received directly by the designated beneficiary, outright and in full. The same is true of property that is jointly owned with a right of survivorship.
Property distributed in a will, by a beneficiary designation, or through certain types of joint ownership are within the full control of the recipient following the transfer. The beneficiary or joint owner is then free to do as they wish with the property, including providing for distribution through their own estate plan.
Spouses often leave everything to a surviving spouse in a will, beneficiary designations, and joint ownership of assets. In a blended family, a surviving spouse who inherits everything in this manner is free to disinherit stepchildren (and even children) from the marriage. While that may seem unlikely in a happy family, it happens more often than many people realize. A surviving spouse may remarry and favor the new spouse over the previous family, or even decide to give the inherited property to a stranger or gold digger instead of their own children.
While leaving property directly to natural children may be one way to avoid this problem, property distributed directly to minor children may be available to the child’s other biological parent (former spouse of the decedent), which creates an entirely different set of problems. Leaving property outright to adult children may not be the best solution either, especially if there are grandchildren in the family or other issues that could jeopardize the intended legacy.
Fortunately, there is an estate planning tool that can address all the potential issues in a blended family. Creating a trust enables a spouse to provide for a surviving spouse and make certain that children are cared for in the future at the same time.
Trusts for Blended Families
A trust is a valuable estate planning tool that provides control over distribution of property after a person passes away. For parents in a blended family, a carefully-crafted trust created by a knowledgeable estate planning attorney can avoid potential situations that lead to children or grandchildren being disinherited, while still taking care of the surviving spouse during their lifetime. Other estate planning strategies may apply as well in specific situations.
Estate planning for a blended family must take into account the individual circumstances of everyone in the family. Preserving relationships and fostering marital and family harmony are also essential goals. For the spouses, the conversations around these issues may be difficult or uncomfortable, but that is not a good reason to avoid them. Your estate planning attorney helps you navigate through all the issues thoughtfully and carefully, to find the right solutions for both spouses and the entire family.
If you have a blended family, you should never try to create an estate plan without assistance from an attorney who fully understands your family, as well as your needs and your goals for every member of the family. Do-it-yourself estate planning can lead to serious negative consequences, particularly for a blended family.
Talk With an Experienced Georgia Estate Planning Attorney
In our Cartersville estate planning practice at Asset Protection & Elder Law of Georgia, we focus on protecting our clients and their assets, whatever their unique circumstances are. We are sensitive to the unique character of the relationships within a blended family and strive to maintain harmony in the family, while taking your estate planning goals fully into account.
We provide services to clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County and Paulding County.