It is said that half of American families are blended families. And the other half may be waiting to be blended.
When spouses have been separated by death, the surviving spouse may find a new companion for his or her old age. If adequate estate planning has not been done, the children may oppose this, even taking legal action to try to annul the second marriage.
Unfortunately, when one spouse in a blended family becomes ill or frail, many blended families begin to look more like a quilt, maybe even a crazy quilt. This can happen even after decades of marriage.
With proper estate planning, both of these unhappy scenarios can be avoided.
If you are in a long-term marriage, your wills can contain an agreement not to change them. If, as is usually the case, you have provided for your property to pass to your spouse, and if your spouse predeceases you, to the children you have together, that is what will happen.
This can deter potential gold diggers and reassure your children, allowing them to welcome a companion for your spouses old age without any monetary reservation.
If you are in your second marriage, you could still do this. Agreeing that your property will pass to your current spouse, and if your spouse predeceases you, to all the children of this and any previous marriage.
Watch the video: Estate Planning for Blended Families
Another approach, which may be called for if there is a lot of money at stake, would be to create a Qualified Terminable Interest in Property. A Qualified Terminable Interest in Property, or QTIP, is a trust which will support the surviving spouse during her lifetime but provide that everything would then pass to the children. The Trustee has the discretion to distribute money to, or for the benefit of the surviving spouse, for health, education, maintenance and support.
This has the benefit of restricting the surviving spouse’s ability to give large sums to other people or spend the children’s inheritance on unrealistic purchases.
There are of course more complicated arrangements. Arrangements which save on estate taxes. With today’s high federal estate tax exemption, few of us need these.
But, since half of American families are blended, and the other half may be, we all should consider ways to preserve our property and family harmony.
Estate Planning attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is active in the Texas and Austin Bar Associations. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.
She assists families of people with special needs, people planning for the retirement years and people administering estates.