Biggest Estate Planning Mistakes Blended Families Make

Did you know that approximately 40% of married couples with children (or families overall) in the United States are considered blended families? That is significant. It is even more so when you consider that this family structure can create
unique estate planning challenges that don’t affect those in first marriages with kids. In fact, things can become very complex when the family includes both spouses who have been married before WITH children from those marriages. It can get even more complex
if one or both partners have been married more than once before, perhaps with children from multiple marriages. The biggest mistakes often occur when the estate plan doesn’t clearly coordinate everyone, including the spouse, biological children, stepchildren,
and the assets.

 

The following are some of the biggest blunders to watch out for when estate planning for blended families.

 

Mistake #1: Leaving all your assets to surviving spouse

Often it might appear to be the simplest and most natural and loving thing to do – leave everything outright to the spouse. However, once those assets become the surviving spouse’s property, the original owner’s kids may lose out—no guarantee
they will receive anything later. Several factors can impact what happens, such as remarriage, a new will, creditors, and other circumstances that can change what the children ultimately receive.

 

Mistake #2: Assuming the will controls everything.

A will is only one piece. Retirement accounts, life insurance, and other assets pass through beneficiary designations rather than through the will. An outdated beneficiary designation can have a huge impact, leading to undesirable consequences.

 

Mistake #3: Ambiguity in identifying children and stepchildren

While it might seem clear to you at the time, terms such as “my children” or “my descendants” can create confusion in a blended family. It is always safer to name each child, whether your intention is to include or exclude a child from
a prior relationship. It is mission-critical to be crystal clear to avoid future conflicts.

 

Mistake #4: Making the assumption that stepchildren will automatically inherit

Being a stepparent doesn’t necessarily give someone the same inheritance rights as a biological or legally adopted child.  As mentioned above, being specific in naming the children can ensure your intentions are clear.

 

Mistake #5: Not protecting the children’s inheritance

Often individuals have two very legitimate goals when it comes to estate planning: 1) they want their spouse taken care of and 2) they want their children to receive their hard-earned assets eventually. The mistake is often in simply leaving
everything to the surviving spouse and assuming the spouse will leave what is left to the children later. A verbal commitment is not enough. Trust planning is an excellent way to ensure your spouse is cared for while preserving the remainder for the designated
children.

 

Mistake #6: Failure to communicate your plans

This mistake can happen in any situation, not just with blended families. It’s generally beneficial to share your intentions with your loved ones in advance. You can answer questions about how you came to your decisions or explain your
thought processes. Letting your family know what you’ve planned and why will help reduce misunderstandings and conflicts down the road.

Whether you are a blended family or not, you want to make sure your estate plan meets your goals, is unambiguous, is legally acceptable, and protects your hard-earned assets and loved ones. And I’m confident you want to work with an estate
planning attorney with the experience to help ensure your estate plan is everything you want it to be. I’d be honored to help you with that estate plan. Your situation is unique –  your estate plan should be as well. Please call me at 513-399-7526 or visit
my website at www.davidlefton.com for more information.