Blended Families Estate Planning

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How do wills and trusts work for blended families? An overview of blended family estate issues.

John Farrell in a suit and tie

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Video Transcript

It's not uncommon for couples to come into the office who are in their second marriage. Typically, they just want to provide for both their new spouse and for their own children. But, oftentimes, the trouble I see when it comes to blended families situations is often even before the second marriage occurs.

I'll give you an example. I had a guy come into my office maybe two years ago who had accidentally been disinherited from his family's home. So, in his situation, what had happened was that his mom and dad had the home with what we call a "joint tenancy with right of survivorship" set up so that when one spouse died, the property just went over to the surviving spouse.

In this situation, the dad died first, and the mom took over the property. And she later remarried. When she remarried, she put the property into rights of survivorship with her new husband. Everything would have been fine had the new husband died first. But, in this situation, she died first. And, when she died, the property went over to the new husband. And, as you can imagine, when the new husband passed away, he left the property to his children and not to the original couple's children. So, this man, unfortunately, had been disinherited, accidentally, from the family home.

So, oftentimes, I see these types of problems occur when, even before the second marriage occurs. Some things you can do include things like having a marriage contract. And, you know what these are called. These are called "prenuptial agreements." I don't often see these with couples that come into my office. They've been married, and maybe they've been married for quite some time, but the prenuptial agreement is just something that they don't consider. It's oftentimes they don't have that. Doing a post-nuptial agreement, oftentimes, is much more difficult.

Some of the things that you can do if you are in a blended family situation is that you can make sure that your Last Will and Testament is shored up and it says what it needs to say. In Georgia, interestingly enough, you can disinherit your own spouse. It's the only state in the Union where you can do that, but you can leave nothing to your spouse in Georgia.

But, more than likely, you might want to split it up where maybe your new spouse receives half of your inheritance and your children from your previous marriage receive the other half. One of the things that you can do is just leave the assets to the children directly in the Last Will and Testament. That's probably one of the more wise things to do. But, the better thing to do is, probably, to leave the assets in a Trust. And, in the Trust, you can designate how those assets are to be divided up. So, make sure your Last Will and Testament, if you leave everything to your spouse, your new spouse in your Last Will and Testament, there may come a situation where you pass away, everything is left to your spouse, and your spouse remarries and, when they do, they can do whatever they want to with everything that you left them. And, oftentimes, what happens is, it gets left to the new husband or the new wife. And, often left to the new husband's and new wife's children instead of your own.

And, of course, again, make sure that your Trust, a Trust is very flexible and can be changed. And your Will can be changed, as well, but the Trust is much more easy to work with.

Another thing you want to be concerned with is beneficiary designations on things like life insurance policies, 401K's, IRA's, things of that nature. You've got to be aware of this. If you leave everything to your spouse, remember, once you leave everything to your spouse, if they remarry, and there's always that possibility that they end up leaving your children, inadvertently, out of an inheritance. Sometimes, on purpose. Maybe things change in the dynamics with the children, and the new spouse decides to, or your spouse decides to, leave everything to the new husband or wife. And, so, if you leave everything to your spouse with a beneficiary designation, just be aware that that type of situation can occur.

More than likely, what you might want to do with your beneficiary designations is leave everything 50/50 - half to your spouse and half to your children. That way, your children are guaranteed to receive a portion of those policies, and your spouse will be benefited from the policies, as well.

Again, you could leave it just in a Trust and have the Trust divide it out. That way, you can make sure that everybody is getting what they should and that it's an appropriate amount. The Trust can help make sure that that occurs.

In summary, you want to be careful with joint property. There's a lot of perils when it comes to joint property. So, just be aware, if you happen to have a lot of property that are jointly owned with rights of survivorship with your spouse, consider getting a marriage contract if you are considering getting married. If you're already married, you might want to consider a post-nuptial agreement. Those are a little more difficult.

The easiest thing to do is to make sure that your Will or your Trust is set up appropriately so that things are divided up between your spouse and your children so that everything isn't just being left to your new spouse.

And, finally, you want to make sure that you be careful with your beneficiary designations. Again, if you leave everything to your new spouse, once the new spouse gets it, there's no guarantee that your children will ever receive any benefit from it.

So, those are the things that you can do. We help blended families take care of these types of issues all the time, and we would be glad to assist you, as well.

Georgia Estate and Trust Planning Guides

Note: If you want to brush up on the basics of Georgia estate planning (Wills, Probate, Power of Attorney, Revocable Trusts, Irrevocable Trusts and Advanced Healthcare Directives) take a look at these free ebooks.

At the Farrell Law Firm, PC, we represent Georgia residents in Marietta, Kennesaw, Acworth, Atlanta, Smyrna, Vinings, Mableton, Austell, Powder Springs, Clarkdale, Ball Ground, Canton, Holly Springs, Lebanon, Cartersville, Calhoun, Waleska, Woodstock, Alpharetta, Fairburn, Palmetto, Red Oak, Roswell, Dallas, Hiram, Dunwoody, Lawrenceville, Norcross, Cumming, Cobb County, Cherokee County, Bartow County, Fulton County, Douglas County, Gwinnett County, and Paulding County.