The dynamics of a “blended” family make estate planning for such families a particular challenge. But, with blended families becoming more and more common, being able to create an effective and comprehensive estate plan for these special families has become more important. An attorney with experience in estate planning for blended families can help you create an estate plan that fits the needs of everyone you love.
What is a “blended family” exactly?
A family where at least one spouse has at least one child from a prior relationship, is considered a “blended” family. They come in all shapes, sizes and combinations. For instance, a couple could have children together, while each spouse has his and her own children from prior marriages. The family dynamic is always different, when a spouse remarries while the children are still minors. In order to accomplish estate planning for these families, it must be done on a case-by-case basis.
Using reciprocal wills for estate planning
A Reciprocal Will is a type of will that simply says, you give everything to your spouse, and then equally to all children. Each spouse will have the same language, which is why it is called “reciprocal.” After the death of the first spouse, the assets of that spouse go to the surviving spouse. Then after the death of remaining spouse, the assets go to the children. The problem with this type of will, when a blended family is involved, is that the children are not all common to the marriage.
Why reciprocal wills are not effective for blended families
A reciprocal will does not provide very much protection for children from a prior marriage because there are no guarantees that the surviving spouse will provide for those children. As the children are not legally entitled to the assets of the non-parental spouse, there simply are no guarantees. Nevertheless, most blended families use this type of will as their primary estate plan, for the sake of simplicity and lower cost, without knowing the real disadvantages of doing so.
What is the alternative to a reciprocal will?
Another option is for each spouse to create their own wills, which do not contain the exact same provisions. This way, each spouse can leave a percentage to the surviving spouse and a percentage to be divided equally between his or her own children, but not the children of the other spouse. The result is that the first spouse to pass away is not forced to rely on the surviving spouse to take care of his or her children.
Life insurance is another option
Another choice blended families have is for the parents to purchase life insurance policies that provide either for the surviving spouse or their own children. Since jointly owned assets automatically belong to the surviving spouse, the most common choice is to purchase life insurance for the children. An advantage of using life insurance for estate planning is that it guarantees, as long as the life insurance policy remains in force, that the children will receive something upon the death of their biological parent.
If you have questions regarding blended families, or any other estate planning issues for families with minors, please contact Anderson, Dorn & Rader, Ltd., either online or by calling us at (775) 823-9455.
To learn more, please download our free Nevada Estate Planning For Families here.