Reaching Agreement with Your Spouse About How to Divide Your Estate
For couples in a second or subsequent marriage, making an estate plan can cause serious conflict. As any estate planning lawyer will attest, most parents have a strong tendency to favor their biological children when it comes to deciding who should inherit their estate. For spouses and partners with children from a prior relationship, the saying blood is thicker than water tends to ring true.
Ideally, couples should discuss estate planning before getting married, especially when at least one person in the relationship already has a child. If estate planning is not addressed prior to the marriage, both spouses should meet with an estate planning attorney after they are married to review and update their wills, powers of attorney, advance directives, trusts, and other estate planning documents. If there is conflict between the spouses over the proposed distribution of their respective estates, an attorney can provide advice regarding common methods of dividing property in blended families and propose provisions to resolve the concerns of each spouse.
Choosing an Executor of Your Estate
If you are remarried and have children from a prior relationship, you may be conflicted about whether to name your spouse or your adult child as executor of your estate. If your new spouse gets along well with your children, you may be comfortable naming your spouse. If there is friction between your partner and your child, that problem may be exacerbated when one of them controls the assets in your estate. Will and trust disputes occur with greater frequency in stepfamilies. Because such disputes are not only costly, but also destroy family relationships, proper estate planning should be used to avoid them.
When choosing an executor or trustee, it is best to appoint a detail oriented, conscientious individual who can be firm and impartial with all heirs to your estate. If your spouse and children are likely to get into a dispute, you may want to consider naming a trusted friend or relative as executor. Another option is to appoint a professional, such as a tax advisor, attorney or trust company. It is best to avoid appointing two individuals as co-executors who do not get along. For example, there are many pitfalls to naming your new spouse and your child from a prior marriage to serve as co-executors. If you are unsure about the choice of executor or trustee, consult your estate planning lawyer about the best choice for your unique circumstances.
If you feel you must name your spouse as executor but are concerned about protecting an inheritance for your children, there are steps you can take to ensure certain property will pass to your children rather than your spouse. By using estate planning methods such as beneficiary designations, inter vivos gifts, pay on death accounts, other types of non-probate transfers, and certain types of trusts such as QTIP trusts, you can ensure your children will receive certain assets irrespective of your spouse being executor of your estate. Consult your attorney about how to protect your child’s inheritance.
Deciding How to Distribute Your Estate
If you are part of a stepfamily, deciding how to divide your estate between your spouse and the children in your blended family can be a real challenge. Before finalizing your estate plan, consider the following:
1. Your spouse or partner may have a legal right to inherit certain property upon your death based on community property or spousal share rights provided by state law. Also, your spouse or partner may inherit your share of real estate and certain other assets based on the manner in which title to such assets is held, such as joint tenants or tenants by the entirety. When deciding what you want your children to inherit, be aware of what your spouse or partner may inherit based on applicable law or how property is titled.
2. If any children in the family are minors, one of the most important estate planning considerations is to provide financial support for such children until they reach adulthood.
3. Another important consideration is the amount of inheritance each child may receive from other parents or grandparents. If one of your children receives substantial gifts from another parent or grandparent while other children in the family do not, this may be a factor in deciding how to distribute your estate.
4. Consider the amount and type of assets each spouse brought to the marriage. A spouse who brings family wealth to the marriage may want that wealth passed on to his biological heirs rather than stepchildren. Most stepparents want family heirlooms, land, and other property that has been in their family for generations to be passed on to their biological children rather than stepchildren. However, the use of specific bequests in a will or living trust can result in the unintentional disinheritance of a child.
5. Your relationship with your stepchildren may also be a factor in how you distribute your estate. If you raised a stepchild from a very young age or the stepchild relies on you for financial support, you may want to leave your stepchild an inheritance similar to one you would leave your own child. However, if your stepchild was an adult or near adulthood when you became involved in his or her life, you may decide it is not appropriate to leave a share of your estate to your stepchild.
To begin the process of deciding how to divide your estate, it is helpful to make a list of your assets and a list of your potential beneficiaries. Our free Estate Planning Worksheet form was designed to make this process easier. It allows you to create an organized list of the property in your estate and then outline whom you would like to inherit each asset. To print a free copy, go to our Estate Planning Worksheet page.
Guide to Providing for Your Spouse and Children in a Second Marriage
If you recently remarried and have children from a prior relationship, you may want to become familiar with the issues that will affect your estate before you start the process of revising your estate plan. The best estate planning book for spouses in a second or subsequent marriage is Estate Planning for Blended Families: Providing for Your Spouse & Children in a Second Marriage. It covers one of the key estate planning issues for stepparents which is how to strike the appropriate balance between your spouse, children, and stepchildren. It provides guidance on difficult issues such as providing financial support for a younger spouse and dealing with differences in income between spouses. It also provides tips for resolving disputes with your partner that may arise as a result of discussing how to divide your estate.
Estate Planning for Blended Families addresses basic estate planning issues for couples such as estate, gift, and generation skipping transfer taxes as well as gifting. If you want to leave a life estate in certain property to your surviving spouse but ultimately want such property to pass to your children, this book explains how to accomplish that. It also provides sample estate plans for both young couples and grandparents. Estate Planning for Blended Families: Providing for Your Spouse & Children in a Second Marriage is available from Amazon.com.
. It covers one of the key estate planning issues for stepparents which is how to strike the appropriate balance between your spouse, children, and stepchildren. It provides guidance on difficult issues such as providing financial support for a younger spouse and dealing with differences in income between spouses. It also provides tips for resolving disputes with your partner that may arise as a result of discussing how to divide your estate.
Estate Planning for Blended Families addresses basic estate planning issues for couples such as estate, gift, and generation skipping transfer taxes as well as gifting. If you want to leave a life estate in certain property to your surviving spouse but ultimately want such property to pass to your children, this book explains how to accomplish that. It also provides sample estate plans for both young couples and grandparents.