The idea of a “Brady Bunch” family, where two adults with children from prior marriages blend their families, is filled with good intentions. With time and patience, a real family can be created if all parties are willing participants. That is until one of the parents dies and the will is revealed, according to the article “The Brady Bunch Breaks Down: Estate Fights Tear Stepfamilies Apart” from The Wall Street Journal.
The typical estate plan for couples and their families is for the surviving spouse to inherit all the assets when the first parent dies. In a blended family, non-biological children are often disinherited. The spouse has no legal obligation to give anything to the biological children, and, making matters worse, the stepsiblings will inherit the deceased stepparent’s assets.
All of the work to blend the families can be undone. The stories are heartbreaking: children changing locks and kicking out their stepmother before the funeral, adult children learning they’ve inherited nothing, while the stepmother receives a lifetime of assets.
Good planning with an experienced estate planning attorney can prevent these and other ugly scenarios.
Establishing a joint trust to give children equal shares after the second parent dies sounds like a good idea. However, if the stepparent moves the assets into a new trust and names their own biological children as the beneficiaries, the first parent’s children are disinherited.
Creating separate trusts can work. However, they need to be iron-clad. Other options are distributing assets while the parent is living or leaving a specific amount (either a dollar amount or a percentage) in the will directly to the named children. Some families keep biological children in the estate plan and fund a separate trust for the spouse and stepchildren.
A prenuptial agreement is a good tool for blended families. However, it should be in addition to, not instead of, an estate plan.
In some states, the default rule is for the surviving spouse to keep half the community property and have no right in the deceased’s separate property. Most states also allow a surviving spouse to claim an elective share, typically a third or half of the estate.
Another problem that blended families must address is planning for illness and incapacity. The spouse usually makes medical decisions and funeral arrangements. However, stepchildren may have different ideas than their stepparents. Both parents should have their wishes expressed in documents, including a Power of Attorney, Healthcare Power of Attorney, Living Will and whatever documents are required by state and federal laws.
Consider naming an executor or trustee who is neither a biological child nor a relative. Having someone who is impartial and trustworthy could relieve pressure on the children.
An estate planning attorney can clarify the possible issues arising for stepfamilies regarding asset distribution, asset protection, medical directives and planning for incapacity.
To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.
Reference: The Wall Street Journal (June 1, 2024) “The Brady Bunch Breaks Down: Estate Fights Tear Stepfamilies Apart”
