More American couples are forming blended families with children from previous relationships, which creates unique challenges in estate planning. When a parent dies, the typical approach for married couples with children is to leave everything to the surviving spouse and then to their children. However, this can be problematic for blended families as the surviving spouse may have no obligation to leave assets to stepchildren.

This often results in stepchildren being excluded from their inheritance while stepsiblings receive everything, leading to disputes that can escalate and cause lasting familial damage. Marya Robben, an estate lawyer with Lathrop GPM in Minneapolis, shared cases where children changed locks and evicted their stepmother before the funeral or adult children were shocked to find themselves disinherited in favor of a parent's new spouse or partner.

According to the U.S. Census Bureau, over one in five opposite-sex couples living together in 2021 included at least one partner with a child from a prior relationship. While there is no public data on will contests among blended families, such disputes are reportedly becoming more common.

The Importance of Complex Estate Planning: For blended families, comprehensive estate planning is essential to avoid future crises. Many challenging decisions must be made with new spouses and children from previous unions.

Worst-Case Scenarios and Prevention: Barbara and James Kurtz created a joint trust in 1995 to ensure their children received equal shares after both parents' deaths. However, after Barbara's death in 2010, James moved all assets to a new trust, naming his son the sole beneficiary. When James died in 2020, Barbara's children found they were not beneficiaries and sued, arguing that the assets should be distributed according to the original joint trust.

The Michigan Court of Appeals ruled that James wasn't entitled to withdraw all the assets from the original trust after Barbara’s death. A trial is scheduled to determine which assets in the new trust are traceable to the original joint trust.

Better planning can mitigate such risks. Experts suggest using separate trusts outside the main estate plan to ensure children receive their inheritance, especially if the stepparent is close in age to the children. Another option is giving children money while alive or leaving them a specific amount or percentage of the estate upon death. Some families keep biological children in the main plan while funding a separate trust for the new spouse and stepchildren.

The Case for a Prenuptial Agreement: A prenuptial agreement is often crucial for blended families, in addition to a well-drafted will or trust. Helen Pickle and Tom Normand signed a prenup to ensure their separate property would go to their respective children upon their deaths. Under Texas law, a surviving spouse keeps half of the community property and has no right to the deceased’s separate property. Most states allow a surviving spouse to claim an elective share, typically one-third or one-half of the estate unless waived.

Spouses usually make medical decisions and funeral arrangements for each other, which can cause conflicts if children have different ideas. Normand, 83, has chosen his columbarium, while Pickle, 73, plans to be cremated and possibly divided between different locations.

Normand’s ex-wife, Rev. Ann Normand, also opted for a prenup when she remarried. Engaged in their 70s, she and Bishop Rayford High Jr. were advised by a retired bishop to get a prenup, which was their only premarital counseling.

Managing Separate Inheritances: Patricia Schultz remarried in her 50s with three adult children, while her husband, Donald, had five. Initially, they left everything to each other, with the remainder going to their children after the second spouse's death. However, Schultz’s father insisted his inheritance go directly to his biological descendants. With her husband’s acceptance, Schultz set up a separate trust for her father's inheritance, ensuring only her biological children would benefit.

Choosing Executors and Trustees Wisely: Experts suggest blended families consider naming an outsider as executor or trustee to avoid conflicts. Heather and Andy Hetchler of Cleveland, who married 17 years ago and brought six children into their marriage, initially prioritized choosing guardians. Now, with their children in their 20s, they named Heather’s brother as successor trustee instead of one of their children.

Navigating the complexities of estate planning can be overwhelming. Ensure your assets are protected, and your wishes are honored with minimal costs and legal hassles. Contact us today to speak to our experts.