Blended families are a diverse group of people and estate planning must be done on an individual basis. The only sure way to make sure your assets go where you want is to do planning. For blended families planning is particularly important. If you have a blended family and you die without a will or a trust, 2/3 of the estate passes to the children and 1/3 passes to the spouse. This may not be what you have in mind.

If you did your estate plan before you got married and did not do a new estate plan that mentions the new spouse, the surviving spouse will have a claim on your estate under the pretermitted spouse law or the augmented estate law depending on the state in which you die. Even if your entire estate consists of separate property. Blended family planning is very important.

Maybe you and your spouse open a business together. Your plan is that the business passes to the surviving spouse. However, you either do not have any corporate documents or they are silent as to what happens when someone dies. Therefore, when the first person dies 2/3 of that company passes to the children.

What planning options do couples with blended families have?

A will or a trust. It is important to determine which type of document is the best fit.

Reciprocal Wills

These will give everything to the surviving spouse. After the death of the surviving spouse, the remaining assets will pass to children.

Non-reciprocal Wills

Each will has different terms. Sometimes the spouses leave a percentage or a fixed dollar amount to the other spouse and remaining portions of their estate to their respective children.

Joint Trust

At the death of the first person to die everything passes to the surviving spouse. Then, everything passes to the children.

Joint Trust with QTIP

At the death of the first person to die everything passes to the surviving spouse in a QTIP trust allowing the surviving spouse to receive all of the trust income and principal for health, education and support. The surviving spouse cannot change the QTIP trust’s beneficiaries. Then everything passes to the children.

Two Separate Trusts

Each trust has different terms. The surviving spouse can be left a fixed percentage or set amount. The rest of the estate goes to that person’s children. Two trusts can be used with a QTIP trust.

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