Estate Planning for Blended Families

Today, blended families are more common than ever. For a blended family, planning for the future can be complicated, as ex-spouses, stepchildren, and children with different parents need to be considered. All of these relationships are treated differently under the Maine intestacy laws, the laws that govern how property is distributed from someone’s estate if that person has no will in place.

In traditional families, assets are often passed from a deceased spouse to the remaining spouse, and then when the remaining spouse dies they are passed down to the children. But children, assets, and spouses from previous or future marriages add complexity to this distribution scheme. For example, what would happen in a family where Mom and Dad both had children from previous marriages and then Mom dies? Would all assets go to Dad? Then what happens when Dad dies? Does Dad give the assets equally to all of the children? Or only his own? What if he had no will? Would Mom’s children be left without any inheritance? And what if Dad remarried before he died? Would his new wife get everything?

In order for assets to go where they’re intended it’s important to have a well thought-out plan in place. For blended families, a basic estate plan that relies on a will to distribute assets often isn’t enough. When there are children from previous marriages to plan for, trusts are used to ensure that no one is accidentally left out. For example, in the scenario above, a revocable living trust (RLT) could be used to make sure that Mom’s kids received part of the entire estate after Dad died. Dad would have the use of all of the assets while he was living, but then it would be predetermined that the assets would be split equally between Mom’s and Dad’s children. This would ensure that any of Dad’s potential new wives wouldn’t walk away with any of Mom’s children’s inheritance. And it would also ensure that Dad didn’t change his will after Mom died to distribute the entire estate to only his children.

Forward thinking is important in the case of blended families. If you have a blended family and are interested in learning about what opportunities you might have to plan ahead for these things, give us a shout. We’re happy to talk about your situation and explain what your risks are.