You may be a little bit older and wiser, but marrying again is still full of excitement and anticipation. However, second marriages, particularly if there are children involved from your previous marriage, present their own unique issues when it comes to your estate plan. Even in the best of “step-family” situations, allowing your new spouse and children to “work it out” after you have died can be a recipe for disaster.
Whether your blended family involves children from a prior marriage as well as joint children, or the introduction of a new spouse, blended families come with their own set of unique challenges. Blended families may also involve both younger and older couples, couples with a wide age gap, and nearly everyone in between.
When the new spouse is significantly younger, this sometimes means that the older spouse’s children are close in age to the younger. These relationships can cause more than just friction between the step-parent and step-children.
Most parents want to ensure that their assets will pass to their children, not their stepchildren. However, absent good estate planning, there is no guarantee that their children will inherit their assets. In fact, if the couple creates common “I love you” wills such that their assets pass to the survivor of them, there is a significant likelihood their children will be totally disinherited. This is because all of their assets will pass to the surviving spouse to do with as he or she pleases. More often than not this means excluding the stepchildren, who then receive nothing. Additionally, in Massachusetts, a surviving spouse has certain rights to claim a share of the deceased spouse’s estate, whether there is a Will or not. The law is very specific and, although your surviving spouse will not get everything, they are entitled to a large share of your estate regardless of you written wishes in your Will.
One way to address this is to utilize a Revocable Trust. A Revocable Trust is a legal document that names and authorizes a “Trustee” to hold title to and manage your assets. Usually, you name yourself as the first Trustee, allowing you to keep control of your assets during your life. You will then name a secondary Trustee to take over the trust upon your death, or should you become incompetent or incapacitated.
Unlike a Will, assets in a Revocable Trust will often pass to your beneficiaries quicker. In Massachusetts, the process by which your Will is probated through the courts can be lengthy, expensive and subject the estate to the rights of the surviving spouse as discussed above. Transferring assets to a trust, while you are alive, can save months of administration time and thousands in legal fees. It also removes your estate (with respect to the assets held in the Revocable Trust) from the probate process and removes the ability of the surviving spouse to claim their statutory share.
Within your Revocable Trust, you can still provide for your surviving spouse. One way is by providing an income stream to your spouse for their life and then having the remaining trust left to your children, or the beneficiaries of your choosing. Additionally, the trust can be written to allow your surviving spouse to have access to principal based on your direction. The terms of a Revocable Trusts can be written to ensure they meet your ultimate goals.
Every blended family is different. As you embark on this new and exciting path, meet with your estate planning attorney to ensure your goals are understood and minimize potential pitfalls that may arise for your family.
—–
Need help, contact our trusted Estate Planning Attorneys!
——
For more information on Trusts, see our other blogs:
–What are the Different Types of Trusts?
–Trusts: Not just for the Rich and Famous
