Protecting Children’s Inheritance in Blended Family
Blended families present their own estate planning challenges.
If the parents choose to utilize Simple Wills, the inheritance of the children of the first spouse to die can be jeopardized.
Here’s how: The Simple Wills established for the parents will tend to direct that, when the first spouse passes away, everything goes to the surviving spouse. Then, when the surviving spouse passes, everything gets divided between the children of both spouses.
But the problem with this “solution” is that the surviving spouse has the legal right to change his or her mind and create a new Will leaving everything to his or her own children after the first spouse passes away. When that happens, the children of the spouse who died first are deprived of their inheritance.
But, by the use of a Family Trust, the parents can have the best of both worlds: They can make sure the surviving spouse has full access to their joint properties to take care of the needs of that spouse. And they can also guarantee that, when both spouses have passed away, the remaining property really will be divided between all the children as agreed.
The mechanism in the trust that makes this possible is simply agreeing at the outset that, once either of the spouses passes away, the survivor cannot thereafter unilaterally change the trust’s directions that apply when the second spouse passes.
So, for a blended family, the use of a Family Trust is an excellent vehicle to let everyone – parents and children – relax and enjoy their lives together without fear of losing an inheritance.