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Mixed Families, Blended Families, Stepfamilies and Estate Planning

Post Series: Blended Families
  • 1.Mixed Families, Blended Families, Stepfamilies and Estate Planning

Estate Planning for Blended Families is crucial to prevent problems.

Blended Family

Family

40% of all married couples are a step couple, where at least one partner has a child from a pervious relationship. Estate planning can be complicated enough, but mixed families or blended families require even more attention to who inherits and how, if at all, the surviving spouse can modify the plan.

When considering any estate plan, a main consideration is what estate document will most effectively carry out your wishes. In blended families, wills are often ineffective.1 The reason for this is that you cannot disinherit your spouse in Michigan2, therefore, the first spouse to pass away will leave everything to the other spouse. This allows the surviving spouse complete control over the inheritance. The most well known illustration of the down fall of this plan is the 1950 Disney classic Cinderella.

The most effective tool for blended, mixed, or stepfamilies is a trust. A trust provides the spouses the ability to control things after their death. This is very helpful in protecting both the surviving spouses during the remainder of their life and children of the deceased spouse. If the two new spouses work from the beginning of their relationship and maintain separate accounts they could effectively create two trusts. Those trust could provide income for the surviving spouse but allow for the remainder to be passed to their children. If the estates are commingled, they could still divide the assets into two trusts in an equal manner and provide for income to the surviving spouse. In some limited situations, a step couple could consider a joint trust that limits the surviving spouses ability to modify the trust after the death of the first spouse. In each of these situations the estate planning attorney will be looking at the assets and talking with the couple about the make up of the family.

While it is important for everyone to have an estate plan, Cinderella is a reminder of the potential dangers of failing to prepare in stepfamily situations. While no one wants to think of their spouse as the evil stepmother or evil stepfather failure to prepare leaves open the real possibility of mistreatment of your children. Estate situations can bring out the worst in people and failing to prepare is preparing to fail.

ENDNOTES

1. It is important to remember that whether a particular estate planning document works for any particular situation is based on the facts. This is why the sentence provides that wills “are often” ineffective. There may be a situation where a will is sufficient.

2. There are some exceptions to this rule. If you have a prenuptial agreement than you may be able to effectively use a will. There are some other exceptions to this rule, however, the purpose of this article is to look at the issue of blended or stepfamilies in general. You should consult with an estate planning attorney to look at your particular situation.

Dafoe Law, PLLC is a Estate Planning law firm serving the Estate Planning, long-term care, probate, and trust administration needs of clients in Saginaw, Bay, Genesee, Huron and Tuscola Counties. Dafoe Law serves Frankenmuth, Bridgeport, Birch Run, Reese, Millington, Clio, Vassar, Saginaw, Saginaw Township, Freeland, Thomas Township, Spaulding Township, Burt, Bay City, Essexville, Munger, Kochville Township, Caro, Cass City, Sebewaing, Unionville, Pigeon, Bad Axe. Travis I. Dafoe is a member of the National Academy of Elder Law Attorney and WealthCounsel. Dafoe Law, PLLC is also a member of the Life Care Planning Law Firm Association.

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Travis Dafoe Elder Law Attorney

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