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When a blended family includes minor children, several layers of protection can be implemented through the estate plan for the children's well-being. The most important is for each spouse’s last will to nominate a guardian for any minor children, with a secondary guardian named in case the primary guardian cannot or will not serve.
Preparing for the Worst and Hoping for the Best
The estate planning process should include a detailed review of the separation agreement for each minor child’s parent, as the guardian nominated in the estate plan may need to be aligned with the separation agreement. If a parent should die without a plan for custody of the minor, the result could be life-changing trauma for the child’s life.
Stepparenting is challenging enough, so preparing for the worst-case scenarios is best. In addition to clarifying who will raise the child if one biological parent dies while the child is a minor, how will the child be financially supported? Will financial support be made available to the stepparent through a trust if the parent dies and the child continues to live in the blended household? These are issues to be explored and documented in an estate plan.
Distribution of Property in a Blended Family
It is commonplace for the children of the first spouse to die to be disinherited, even when this is not the couple’s intention. If the couple has a simple will giving all assets to the surviving spouse upon the first spouse’s death, there is nothing to compel the surviving spouse to give their stepchildren any part of their parent’s estate.
If the biological parent dies and all of their assets are left to the second spouse, what happens to the inheritance of the minor child? Since minor children may not legally receive inheritances until adulthood, proper estate planning is required to avoid disinheriting minor children. One way to address this is with a trust for their benefit. The biological parent could be the trustee, with a secondary trustee named in case the parent predeceases the child. The terms of the trust would determine how the trust assets are to be used for support, education, etc.
Clarifying Intentions With an Estate Plan to Protect the Children of Both Spouses
Trusts may allow the surviving spouse to maintain their lifestyle without disinheriting stepchildren. Depending upon the situation, the couple may choose to place their primary residence in a life estate to give the surviving spouse the right to remain in the home until they die, when the home can be sold, and proceeds distributed according to the terms of the trust.
Planning in Advance to Anticipate the Future
If there is no will, the laws of intestacy will govern the distribution of assets. In some states, the surviving spouse receives half of the estate, and the remaining estate is distributed between the children of the decedent. Just as important as the distribution of assets are the questions of what happens to minor children in a worst-case scenario, hence the importance of estate planning.
