Old plans don't always reflect new realities.
If you divorce, remarry, and fail to plan properly, your final wishes might not unfold the way you expect. A comprehensive estate plan, however, covers how you want your estate distributed and to whom.
Beyond Equal: Redefining Fairness as Equitable
Many people think “fair” means “equal.” In a blended family, equal shares can be unfair — a child with special needs or less money might benefit from more help. A fairer measure is equity: look at each person's finances, your relationship with them, and any support you've already given.
If you remarry and don't update your estate plan, your children from a prior relationship could end up with nothing from your estate.
The "Why" Conversation
No legal document can stop a fight — only clear communication can. To avoid hurt feelings, parents of children in mixed families can explain their reasoning with or without the help of a professional or mediator.
Examples:
- To adult children: “I want to make sure your future is secure and also that Bob can stay in our home. Here's how I'm balancing those goals so there are no surprises.”
- To a new spouse: “I plan to provide for you and protect the inheritance for all of my children. Let's talk about how to do both.”
The Great Trade-Off: Security vs. Guarantee
Blended families face a trade-off:
Option 1: Protect the surviving spouse's lifestyle, giving them more control over the assets.
Option 2: Guarantee the children's inheritance. That limits the spouse's control but gives the kids more security.
Depending on your situation, one way to balance leaving an inheritance to a surviving spouse while ensuring any children or other beneficiaries also inherit is to create a trust. A third-party (or neutral) trustee like a bank or another financial institution could be named to manage the trust and reduce any conflict.
The right choice depends on your goals and finances. An experienced attorney can help you review and explain your options. Also, coordinate with your financial advisor. Certain trust or gifting choices can have tax consequences or planning advantages.
Another consideration is beneficiary designations. Assets like life insurance and retirement and transfer-on-death (TOD) accounts pass directly to the named beneficiary, overriding a will or trust. A common error is to leave an ex-spouse or the new spouse as the sole beneficiary on an IRA, unintentionally disinheriting anyone named in a will.
No one solution suits every situation. The right one is tailored to your unique needs.
If you've remarried or are in the process, a brief review now can protect your loved ones and prevent surprises. Contact us online or call (207) 377-6966 today for a free consultation.
