Modern Families and Estate Planning: Protecting Blended Families
Anyone who’s ever watched "Modern Family" knows that today's families come in all shapes and sizes. The classic image of a family consisting of a mother, father, and two kids (or was it 2.5? Still wondering about that .5!) is a thing of the past. In this article, we’re zooming in on a common modern-day family type: the blended family.
Understanding Blended Family Dynamics
A blended family forms when parents divorce and at least one of them remarries. While harmony might reign while the parent is alive, the situation often changes after their death. Why? Because the law hasn't fully adapted to our evolving definition of "family." The legal system tends to favor the surviving spouse, which works well when both parents share children. But in blended families, children from previous marriages can be left out of their inheritance.
Here are some reasons why this happens:
The parent fully trusts the new spouse, believing they’ll always act in the children’s best interests.
The new spouse may prioritize their own interests or those of their children from a previous marriage.
The parent might be unaware of the potential issues and hasn't consulted a knowledgeable attorney.
A Real-Life Cautionary Tale
Consider a scenario shared in a recent MarketWatch article. A woman recounted how her father (let’s call him “Dad”) owned several properties, including her childhood home. After remarrying, his health declined, and his new wife (let’s call her “Stepmom”) took financial steps to qualify him for Medicaid, a needs-based program that protects assets for future generations.
At first glance, Stepmom seemed to have the children’s interests at heart. However, to qualify for Medicaid, Dad had to transfer his assets while he was alive, and he transferred them to Stepmom. When Dad passed away, Stepmom owned all his properties and decided to sell them all, keeping the proceeds for herself and her daughter, leaving Dad’s children from his first marriage with nothing.
Is This Legal?
It might seem unfair, but it’s perfectly legal. Once Stepmom owned the properties, she had the right to do as she pleased. The children from Dad’s first marriage had no legal recourse, no matter how unjust the outcome seemed.
Steps to Protect Your Children
To prevent such a situation, here are some proactive steps you can take:
Acknowledge the Inevitable: As Benjamin Franklin said, “Nothing is certain but death and taxes.” While we can avoid taxes with careful planning, death is unavoidable. Accept it and plan accordingly.
Communicate Openly: Have a heart-to-heart discussion about your wishes, values, and goals with your family. This can prevent misunderstandings after you’re gone.
Educate Yourself: The most crucial step is to educate yourself now. Don’t rely solely on the internet, as laws vary by state and family circumstances differ. Consult with professionals who understand your specific situation.
Work With a Knowledgeable Attorney: Estate planning isn’t one-size-fits-all. You need a customized plan that addresses your family’s unique needs. A trusted attorney can help you create a plan that ensures your wishes are fulfilled and your loved ones are protected.
Your loved ones don’t have to face avoidable hardships when you pass away. With open conversations, proper education, and guidance from a skilled attorney, you can create a plan that maintains harmony and ensures your family is taken care of according to your wishes.To learn more about how we approach estate planning from the heart and yet with all the strategies you need to keep your assets in the family, schedule a complimentary 15-minute call with our office.
This article is a service of Zarda Law, S.C. We do not just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer Planning Session, during which you will get financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by scheduling a Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.
