Dynamics within a blended family are always a lot trickier than traditional nuclear families. It takes an extra effort to keep the family cohesive, especially when money is concerned.
When it comes to the biggest threat to estate planning, a survey of estate planning attorneys conducted at the 53rd Annual Heckerling Institute on Estate Planning didn’t talk about taxes or missing wills. They said that family conflicts were the biggest threat.
Investment News’ recent article, “Reducing potential family conflicts,” explains that a blended family can result from multiple marriages, children from a current or former marriage, or children involved in multiple marriages. There are more "blended families" in the U.S. than ever before. More fighting over estate planning occurs in blended families.
The key element in any conflict resolution is open and honest communication. It’s especially the case, when it involves a blended family. In many instances, it’s best to explain a proposed estate plan to the family in advance.
If anyone objects, listen to their point of view and try to be empathetic to their position. You may wind up with a compromise, or, if no changes are made, at least the family member had an opportunity to air their grievances.
One potential solution to minimize conflicts within a blended family may be a prenuptial agreement. The agreement is signed prior to the marriage and outlines the financial rights of each spouse, in the event of a divorce or death. Prenups are particularly useful in second marriages, especially when there is a disparity in age and wealth between the parties.
However, not every married couple in a blended family has a prenuptial agreement. Even if they do, blended families can still have family conflicts in estate planning.
The use of trusts, including revocable living trusts, regular communication and, if necessary, the use of a “no contest” clause in the couple’s will are three possible solutions to conflicts in a blended family. Most estate planning attorneys have had considerable experience with estate planning for blended families, so speak with your lawyer about their experiences and explore possible solutions with their guidance.
Reference: Investment News (December 9, 2019) “Reducing potential family conflicts”