Issue 1: Simple wills inadequate to protect children from previous marriages:
Joe (age 77) and Beth (age 75) are in a long-term second marriage. Joe has two children from a previous marriage, Ashley (age 50) and Dawn (age 48). Beth also has two children from a previous marriage, Jeremy (age 45) and Jason (age 44). Joe and Beth have simple wills that give their entire estate to the surviving spouse with contingent gifts for the four children. After Beth dies, Joe moves closer to his children and becomes estranged from Jeremy and Jason. He changes his will to give his entire estate to his children.
Issue 2: Delayed inheritance leads to litigation:
Andy, a widower (age 56), marries Paula (age 25). Andy has two children, Alexis (age 24) and Lauren (age 21), from his previous marriage to Maureen. Andy wants to provide for his new wife, but does not wish to disinherit his children. He creates a trust that names his two children as remainder beneficiaries. Andy dies and his children eventually become resentful for having to wait until Paula’s death to receive their inheritance. They institute litigation against Paula over extravagant distributions from the trust.
Issue 3: Long term care needs threaten inheritance:
Linda and Mike marry when they are in their 60s. Linda has significantly more assets than Mike. Both Mike and Linda have children from previous marriages. Linda is concerned that her children’s inheritance will be diminished if Mike ever requires long term care, which she would have to pay for with her own funds.
Issue 4: Child’s blended marriage raises estate planning concerns:
Chris and Lisa have a happy first marriage with two children, Ryan and Rory. Rory is married to Ken, who has children from a previous marriage and has difficulty keeping a job. Chris and Lisa are concerned that if they leave an inheritance outright to Rory, Ken will “permanently retire” and live off of the inheritance.
WHAT ARE BLENDED FAMILIES?
• Married couples in which one or both spouses have children from a previous marriage.
• Families with children who are in second or subsequent marriages and who have children
from previous marriages.
• Families with children whose spouses have children from previous marriages.
Blended families can face complex estate planning challenges. Issues can arise between spouses, or between children and their spouses. Typically, individuals in blended families want to provide for the spouse as well as the children from the previous marriage. In some cases, they also want to provide for the children from their spouse’s previous marriage.
ARE BLENDED FAMILIES COMMON?
• Several trends related to divorce have increased the number of blended families.
• Approximately 50% of American marriages end in divorce.
• Approximately 60% of remarriages end in divorce.
• Approximately 43% of marriages are remarriages for at least one party.
• The average duration of these marriages is 7.8 years.
• There are approximately 1,160,000 new divorces each year.
• Approximately one million children each year have newly divorced /divorcing parents.
• 54% of divorced women remarry in five years.
WHAT ESTATE PLANNING CHALLENGES DO BLENDED FAMILIES FACE?
• In a blended family, estate planning challenges can include:
• The potential for children to be disinherited.
• Delays in the children’s receipt of inheritance until after the death of their parent’s spouse.
• The need to protect assets from former spouses.
• Disputes over division of authority or responsibility.
There are many ways to plan for these challenges.
Thomas Walters Estate Planning builds lasting relationships with our clients based on the highest standards of integrity and professionalism. We help our clients customize plans that meet their unique needs, concerns, and goals. We compassionately assist families after the loss of a loved one. We believe that a well thought out and professionally developed plan will provide peace of mind making transitions for generations stress free and cost efficient.