Articles Posted in Blended Families

Regardless of the makeup of a family, family dynamics can often be complicated. But fighting about food and what to watch on TV are simple problems compared to disputes about a loved one’s estate. These lawsuits can cost millions of dollars and tear families apart. Instead, there are steps that estate planning attorneys recommend taking in order to avoid these issues—especially during the emotionally charged times after a person has passed away. When it comes to estate planning—like with many other family disputes—communicating can go a long way toward minimizing future problems and estate lawsuits.

Communicating Estate Plan Intentions

Having ongoing conversations with loved ones about estate planning intentions is crucial. While discussing what assets a person intends to leave to others with those people may feel awkward, there can be major consequences otherwise. Lack of communication can lead to family rivalries—and even lawsuits—if a loved one feels they were unjustly excluded from the estate.

No will is the same; however, some wills are more complicated than others because of family dynamics and related situations. One family dynamic that makes a will slightly more complex is when a blended family is involved. A blended family—made up of families that come together over time with new relationships—often requires navigating more family dynamics to discern who an individual will leave their assets to. This may involve updating the will as relationships change. Below are some of the most common challenges faced by blended families during the estate planning process—along with how to avoid these issues.

How to Divide the Assets in an Estate Plan

For many blended families, it can be difficult for the person drafting the will—called the testator—to decide who to leave their assets to. They will likely want to provide for their family, and this family may include stepchildren, children from a previous marriage, and other close relatives. Therefore, it might be challenging to decide how much to give to each—especially if some loved ones are either not legally connected to the testator or if family members do not get along.

Houston families with adopted children have to keep certain concerns in mind while estate planning. If a child is not formally and legally adopted, that child generally will not receive the same treatment in the event of a parent’s death. Inheritance and property will not usually pass on to that child in the same way that they would to a biological child. Adoptions can take a long time to become final. Until an adoption has been finalized, the child is not considered a child in the same way that a biological child is for estate purposes.

For example, a stepchild who was raised by a stepparent may be considered the same as a natural child within the family, but if the stepchild was not legally adopted by the stepparent, the child will not be treated in the same way under Texas estate law. In the event of the stepparent’s death, Texas estate law would not treat that child the same as a biological child. This means that if the stepparent died without a will, generally, the stepchild would not inherit any of the stepparent’s assets. However, there are some circumstances under Texas law in which a child can inherit from a stepparent and where there was an agreement to adopt the child.

If a parent legally adopts a child, under the Texas Estates Code, that child will be treated in the same way as a natural child. In the event of a legal adoption, generally, the child’s biological parents’ parental rights will be terminated. In some cases, that child will lose their right to inherit by default as a child from their biological parents. However, in Texas, an adopted child normally can also inherit from the child’s natural parents.

1.29.20Blended families are almost the new normal in America. A Pew Research Center analysis shows that as many as 40% of all new marriages include at least one person who had been married before. For another comparison, in 1960, 13% of all married adults had been married before, compared to 23% today.

In a blended family, one or both spouses have at least one child from a previous marriage or relationship. Financial and legal challenges are more complicated, as are the family dynamics between parents, step-parents, siblings and step-siblings.

CNBC’s recent article, “4 ways to help blended families navigate finances,” reports that a staggering 63% of women who remarry come into blended families, with 50% of those involving stepchildren who live with the new couple, according to the National Center for Family & Marriage Research.

7.5.18With about half of all marriages ending in divorce, second marriages and blended families have become the new normal in many communities. Estate planning for a blended family requires three-dimensional thinking for all concerned.

An article from The University Herald, “The Challenges and Complexities of Estate Planning for Blended Families, ” clarifies some of the major issues that blended families face. When creating or updating an estate plan, the parents need to set emotions aside and focus on their overall goals.

Estate plans should be reviewed and updated, whenever there’s a major life event, like a divorce, marriage or the birth or adoption of a child. If you don’t do this, it can lead to disastrous consequences after your death, like giving all your assets to an ex-spouse.

4.9.19The idea that spouses and their stepchildren will share the legal power to make health care decision sounds good in theory, but, in practice, there may be some unexpected side effects.

Simple things get complicated in blended families. The idea that stepchildren and a spouse will work together to make health care decisions when their parent is ill, seems reasonable. However, what happens when the spouse and stepchildren differ on what is best?

A recent article from the Grand Forks Herald, “Joint power of attorney complicated this couple's wishes,” shares the story of what happened to one woman when her elderly husband was injured and then contracted pneumonia in the nursing home. His wife alerted her adult stepchildren, who rarely visit, and they immediately arrived to help out.

4.3.19It seems like families need to spend more time discussing estate plans and their finances, especially if they are blended families, to prevent major disruptions.

For the second consecutive year, family conflict was named as the biggest treat to estate planning by estate planning and elder law attorneys and other professionals attending this year’s annual Heckerling Institute on Estate Planning.

The survey, conducted by TD Wealth, found that nearly half (46%) of respondents said that family conflict was the biggest threat to estate planning in 2019, followed by market volatility (24%) and tax reform (14%).

Brad pitt and kidsHere’s one celebrity savvy about estate planning. Actor and producer Brad Pitt has an estate plan that will keep his money away from his ex and benefit his children through a $250 million trust.

After reading about so many celebrities who fail to plan for the future, it’s refreshing to learn that one bold-face Hollywood star has taken steps to create a will and care for his children. In the recent article from Wealth Advisor, “Even Brad Pitt Has Prepared A Will (And A Post-Divorce Trust),” the 54-year-old Pitt has achieved the dual purpose of keeping his millions from his ex-wife and had a trust created to divide his money between his six children.

A source, who’s a family friend commented, “Brad’s intent is that any money he doesn’t have to give Angie in a divorce settlement and for child support is well-protected. He’s setting up a firewall that is specifically intended to keep her hands off his cash.”

7.19.18Neglecting to plan for family dynamics can destroy the best estate plans. Make sure to address both difficult personalities and tax liabilities. They can be equally problematic.

Saving loved ones from a large tax bill and maximizing the transfer of wealth across generations is great, but your estate plan needs to do more than that. The plan must consider the dynamics of your family, how they may treat each other after you pass and what can be done to protect them from each other.

CNBC’s recent article, “This threat could devour thousands of dollars from your estate,” notes that even families that look like they're perfect, are not. Perfection doesn't exist. When families fail to address these types of issues in their estate plans, it can create conflict between beneficiaries.

7.5.18Estate plans are as individual as the families that they are created for. Blended families need estate plans that address their own dynamics, including the resources and children that each spouse brings to the new family.

Blended families who marry, when children are young, are different from those who marry after their children are grown and have established their own families. Without years of living together as step-siblings, the dynamics may be considerably different.

Hometown Life’s recent article, “Blended marriages take careful estate planning,” discusses what happens when second marrieds combine their finances and must determine how to divide their estate. Their big question centers on how to address the kids, upon both of their deaths.

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