Wills and estate planning for blended families
Deciding who to leave your estate to when you pass away can be tricky, but it can be even more so when you have a blended family.
Modern families are becoming more and more complex and so we have considered why it is important to plan ahead and think about your future in this article.
What is a blended family?
A blended family – or a stepfamily – is a family that consists of a couple, who may or may not be married to one another, where one or both has children from a previous relationship and they may also have children together.
What are the challenges of a blended family?
It may be commonplace for a couple to have mirror wills prepared when they first think about their succession planning and asset protection. However, this is not always appropriate for blended families. There is likely to be a wider range of people to factor in with differing needs and circumstances.
We have demonstrated this below.
Florence, who is divorced, marries Edward. She has two children from her first marriage – Annie and Finn. She and Edward also have a child together, Katie. Florence dies with a mirror will in place, leaving her share of the estate to her husband, Edward.
Florence trusts that Edward will divide their estates equally between Annie, Finn and Katie upon his later death.
However, Edward later meets a widower Margot and they marry. Margot has a child from a previous relationship, Scarlett. Over time, Edward loses touch with Annie and Finn, and when it comes to redrafting his will, Edward decides to leave the estate to Margot. The consequence of this is that he has disinherited Annie and Finn of their mother’s share of the estate.
This can happen unintentionally in blended families, even if a surviving partner doesn’t deliberately amend their will. This is because any existing will can be automatically revoked upon a later marriage. Therefore, had Edward married Margot and not updated his will, he would have died “intestate”. According to the laws of intestacy, depending on the value of Edward’s estate, much or all of it will pass to his new wife, Margot, who is under no obligation to include Edward’s children in her will.
What should you be thinking about?
There are many considerations to have in mind when thinking about later life and protecting your estate for future generations.
It may be appropriate to consider the use of trusts to protect your assets and the inheritance you want to pass to your children of both your previous and current relationships. There are many types of trust available and understanding your wishes and goals is key to advising you on the most appropriate content and structure of your new will. In the example above, Florence could have placed some of her assets into a trust which Edward would have benefited from during his lifetime, with Annie and Finn inheriting them on Edward’s later death. We can help to ringfence assets from later remarriages to ensure security for children of previous relationships.
Other forms of trust, such as discretionary trusts, can provide more flexibility for benefiting a potentially wider range of people. They allow your estate to be distributed to several loved ones whilst considering each of their needs after your death.
The inclusion of a trust within your will also protects your assets in the trust from any financial vulnerability of your surviving spouse, such as bankruptcy or a future divorce, where those assets could otherwise form part of a settlement agreement.
Have you thought about who you may want to help you with your finances or health and care decisions if you lose capacity to decide these matters yourself? Having a lasting power of attorney in place can prove extremely important in a blended family because without one, someone you may not wish to make decisions on your behalf could try to do so against your wishes.
This may require advice from a professional particularly where you have a blended family. It can sometimes be difficult to appoint an attorney in complex family circumstances as the most obvious choices may not always be the best option, particularly if there’s conflict between family members.
How can we help you?
Using a professional advisor can assist you to eliminate stress and worry less about your future. We can help to give you and your family peace of mind that your personal affairs have been considered comprehensively and are in order, providing you with tailored advice to ensure your wishes are met. If you would like further information, please get in touch.
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