What are the Options for Splitting Assets in Blended Families?
The blending of families to create a yours, mine, and ours scenario is very common. In the ideal, the union of two individuals with offspring from prior relationships remains harmonious and uncomplicated even after the passing of each parent. In the best instances, each spouse treats the other’s children as their own, and family bonds strengthen.
But sometimes problems arise, particularly when one or both parents pass away and either:
- the surviving parent changes the previously agreed upon asset division in favor of their own offspring, or
- the will favors the common offspring over children brought to the marriage.
These situations can result in legal challenges to the will and designated division of assets.
What is a Blended Family?
Estate planners view blended families as having one or more step-children resulting from prior relationships. Blended families may consist of:
- Spouses who both bring children from previous relationships
- One spouse with children from an earlier marriage
- Life partners who bring children from past relationships
- The blending of offspring from prior marriages with children from the new one
Thoughtful estate planning with a knowledgeable estate lawyer will reduce the potential for conflict later. Estate lawyers are familiar with the many nuances and pitfalls of these circumstances and can help guide you to minimize the potential family friction.
What Can Happen with No Estate Plan for Your Blended Family?
Without a clearly defined estate plan, unintended consequences may result.
If the surviving partner to a marriage dies without a will, the entire estate may go only to the child of that spouse. Or, if the survivor had remarried, the estate may pass to a new spouse, unless otherwise designated in a will.
As a result, the child of the first deceased spouse receives nothing.
Situations to Consider
- Size of the joint estate
- Support for the surviving partner’s remaining years, mainly when the survivor is relatively young. This can could reduce the total estate substantially.
- One or more of the children have special needs and requires more support than the others.
- Funds and property from a prior marriage that were initially intended to go to offspring of that relationship
- Inheritances from deceased relatives from one side of the new family
- One partner brought substantially more assets to the relationship than the other
- Ages and needs of all the children
Problems and Challenges to Avoid
The first order of business for parents of blended families is to have a frank and open discussion about how the assets should be distributed if both were to pass away the next day. While this is a dismaying thought, the scenario can crystallize the issues and allow the couple to define their sincere wishes.
However, even though both agree to a specific division of assets, a surviving spouse can still change their will in favor of their own children.
Also, you may find it necessary to protect against a former spouse trying to secure assets following your passing.
Possible Solutions
Every situation is different, so there are no standard solutions. The most crucial step is to consult with a reputable estate lawyer to help you sort through the many variables, scenarios, and options available to you.
A few potential solutions to ensure assets pass appropriately to your designated heirs include:
- Postnuptial Agreements: With the guidance of an experienced estate attorney, the couple can develop an agreement that specifies the surviving partner’s rights and obligations following the death of the other spouse. The contract may also waive the surviving spouse’s rights to certain assets that the deceased acquired before the marriage and intended for their offspring.
- Trust QTip: Also known as Qualified Terminable Interest Property, Trust QTips can be designed first to provide lifetime financial support for the surviving spouse, and then distribute the remaining assets equally or as designated among the offspring.
- Life Insurance Policies: Each parent can implement a life insurance policy to pay specified beneficiaries.
- Trusts: New Jersey Law provides for a variety of trusts that first ensure the care of the surviving spouse, and then ultimately disburse the remaining assets as designated. Designation of the trustee to manage the trust, whether a family member or not, can be determined at the time the trust is created.
Contact a Qualified Estate Lawyer
A qualified estate lawyer can first counsel you regarding all of the possibilities of ensuring your assets will be distributed according to your wishes. A simple will may not be enough to guarantee this.
In Westfield, Union County, New Jersey, the Law Office of Nicholas A Giuditta III offers three decades of professional estate planning and elder law experience to ensure his clients’ rights are met
Complications that result from blended family situations can be significant. Eliminate potential conflict by having an open discussion with your partner, and following through with legal solutions with a qualified estate lawyer.
For an appointment for a free consultation, contact the Law Office of Nicholas A. Giuditta III, a New Jersey Estate Lawyer, at 1-908-232-0099.