Scenario No.1 – Single Mom with Kids Marries Single Dad with Kids
Although this type of “stepfamily” is becoming more and more common, it comes with significant hurdles to overcome. If you are part of a blended family like this, you are probably well aware of the psychological obstacles. The marriage will bring changes: most likely a new home and new routines and maybe even a new job or school, new town, or new roommate. All of this change puts stress on both the couple and their children, who may feel a sense of loss over having to share their biological parent not only with the new spouse but also with their new “step” siblings.
However, many blended families don’t know that they face unique estate planning obstacles as well. The most likely estate plan for a married couple is matching wills which say: “I leave everything to my spouse and thereafter equally to my children.” We generally call these “I love you” wills, but, as we have written before, they can send the opposite message to children in blended families.
What many people don’t understand is that a will is only effective to transfer assets once. For example, we’ll look at a fictitious blended family, Bill and Mary Sample, who have the estate plan described above. When Bill dies before Mary, all of his property legally passes to Mary and the “thereafter” clause in his will is null and void. Not only do Bill’s kids not get anything at the time he passes away, Mary is then free to leave all of her property, including everything she inherited from Bill, to her children (or her next spouse, etc.). Imagine how Bill’s children will feel when someone else inherits their father’s home and prized possessions! Unfortunately, this happens all too often.
In order to ensure that each member of your family receives what you want them to have, and to prevent fighting, name-calling, and litigation among your children and the “evil” stepparent or stepsiblings, a revocable living trust should be considered. By leaving assets in trust, you can provide for both your spouse and your children and even explain why and how you want to take care of each. A clear expression of your wishes can go a long way toward preventing WWIII!
If you would like to learn more about revocable living trust planning, you are welcome to attend one of our monthly Truth About Estate Planning workshops.