When couples bring children from a previous relationship into a marriage they create a new family. Then, they may or may not have children together as well.
Blending two families into one can be a joyous process but it also becomes complex when choosing how to divide assets in estate planning for after your death.
How do you create an estate plan that satisfies everyone and doesn’t cause resentment within the family you’ve created after you’ve passed? What are some of the most common problems in estate planning for blended families and what is the best way to address them?
Poorly Drafted Estate Plans May Result in Accidental Disinheritance
Under Colorado law, an individual’s assets automatically go to their spouse after their death unless otherwise allocated in a flawlessly executed estate plan or last will and testament. This causes significant problems in blended families.
The decedent’s children may find themselves accidentally disinherited when a parent’s estate passes to their stepparent. The stepparent could decide to share the estate equally, but they could also decide to keep everything for themselves or give portions only to their biological children.
Even worse, if the spouse remarries and then later dies, the assets that they inherited go to their new relationship, completely bypassing the children of their previous spouse. As you can imagine, this creates hard feelings.
By leaving a well-executed estate plan with an amount left to your spouse as well as assets held in trust for biological children and step-children, the terms of inheritance are spelled out so the state’s intestacy laws do not take effect and turn all of your assets over to your new spouse.
What to Address in Your Estate Plan If You Have a Blended Family
When drafting a new estate plan after a second marriage, your attorney will ask you to address the following:
- How you want your assets divided between your spouse, children, and stepchildren
- What happens to your assets if your spouse remarries after you die
- Should your children inherit your assets after you die or not until both you and your spouse die?
- Should your home go to your children or your spouse?
Regardless of how much you love and trust your spouse, it’s essential to have a well-thought-out plan in place to avoid contention between family members after you pass. Rather than a sign of mistrust, an estate plan is a means of protecting all of your loved ones so you ensure your family remains on good terms after your death.
Avoiding Probate After Your Passing
When a person dies without an estate plan, their assets must pass through probate before the courts disperse them according to the state’s intestacy laws. When creating or updating an estate plan for a blended family, creating a revocable trust allows your estate to be passed on to your family members as you’ve directed without the need for probate. With a revocable trust, you still retain control over the assets and may remove them from the trust if you need them. This also helps to minimize inheritance taxes for large estates.
Getting Started on Asset Division in Your Estate Plan for a Blended Family
Hire an experienced Denver family attorney to help you develop a sound estate plan for your blended family. Be sure to have a conversation with your spouse before beginning your plan to ensure that you’re both on the same page. Then, gather all relevant documents to make an inventory of your assets before meeting with your estate-planning attorney.