14 Jun TRUSTS FOR BLENDED FAMILIES: Justin Crain, Partner
A blended family is one that includes at least one spouse with a child or children from a prior marriage. The structure of a blended family can vary greatly and can include a husband with his own children, a wife with her own children, and even children born to the husband and wife together. In these situations, where individuals each have assets that they have brought to the marriage, they typically want to both provide for their spouse’s needs and ensure that their assets will ultimately go to their children. Without a detailed estate plan, a surviving spouse can easily disinherit whoever he or she chooses, including the deceased spouse’s children. To guarantee that what you want to happen with your assets will actually happen when you pass away, it is imperative to establish a plan ahead of time. Assuming your family will “work it out” after your death is a recipe for disaster. Additionally, letting the courts determine how your assets will be distributed can be very difficult for the family and loved ones. If you want to provide for your spouse and your children, particularly when your spouse is not the parent of your children, you may want to structure your estate plan so that assets are left in trust for them after your death. Not doing so can create a tragic outcome.
A married couple of a blended family could, for example, establish a joint trust that includes protection for the children and each spouse. This type of trust can provide great peace of mind in later years and eliminate hard feelings and strife within your family.
Example: Scott and Allyson have both been married before and each had two children from prior marriages. Scott brought significant assets into the marriage. To protect the surviving spouse and their respective children, and with the guidance of an estate planning attorney, Scot and Allyson established a comprehensive estate plan that included a trust. Both Scott and Allyson are designated income beneficiaries of the trust. Upon Scott’s death, Allyson becomes the sole income beneficiary of the trust and she can use the principal of the trust for her health, education, maintenance, and support. Upon Allyson’s death, the remaining trust assets will go to Scott’s children.
You will reap uncountable benefits in the long run if you have honest conversations with your spouse about your goals for the future and how you expect your assets to be distributed. If your children are adults, it may be advantageous to include them in the conversations so everyone knows what to expect. Blended families are very diverse and estate planning for blended families can be complicated. It is beneficial to obtain guidance from an estate planning attorney who specializes in these practices to ensure that, upon your death, your assets are distributed according to your desires.