We have administered thousands of estate plans and wealth over the last 26 years for families that consider themselves blended. If you have a blended family, meaning, you have been married more than one time, or have children from different relationships, there are several things to consider so your estate plan succeeds.
First, you need to know what assets exist in your relationship and outside of your relationship. What does this mean? It means, if you are a California resident, you need to know what assets will be considered community, and what assets will be considered separate property. The most common mistake people make is believing an asset is separate, when it is actually community property. We have many people who tell us that an asset is separate, and when we investigate the asset further during our planning consultation, we discover that the asset was actually acquired during the marriage. An example may be a Calabasas resident who has a bank account in which she made deposits of a paycheck during the marriage, but which name stayed in her name. Second marriages lend themselves to many financial conflicts which can be avoided with simple advice about wealth planning.
Secondly, we as your wealth planning lawyers need to know if you have a prenuptial agreement or a post-nuptial agreement. If you as our client don’t tell us about these, we will not have enough information to unblend your estate plan. Unblending means, we provide for your kids separately than for your spouse’s kids. If you expect your kids to have unusual feelings about their step-siblings, you should seriously thinks of selecting professional fiduciaries to act as your successor trustees. There is too much at stake in potential Ca Trust litigation when you have step-children and feelings tend to get mixed up after a person dies.
Third, track any specific assets which you want to leave as specific gifts. How is this relevant? Lets say that you left your business to one side of your family. As time goes by, you may sell the business, or may sell your shares, but keep a part of the business, or its rents. Be sure that if you change a specific gift in any way in the future, that you discuss your estate plan with your attorney. Some of the most common disasters in estate planning come from believing that you were fair in your disposition of your trust, but failing to keep it funded, or to evaluate it periodically for changes in assets. Talk to our wealth planning attorneys in Los Angeles about specific gift planning pitfalls.
Fourth, wealth planning to unblend the family inheritance is full of steps to make sure that each of its parts will be administered separately, yet it complies with the marital deduction. So, while QTIPs require that the income goes to a spouse, we look to other elements in planning, when you have disgruntled beneficiaries. Deciding whose interest comes first if one of the first point in determining who gets what when the first of the two spouses dies.
If you are a second wife and are concerned about your husband’s children, this concern can be real. What happens sometimes in newer marriages is that the children from the first marriage want the house sold, which may or may not be desired by the surviving spouse. Getting clear about the house, who will pay for the expenses of the house, and who will have the right to live in it, is a routine party of estate planning.
More interesting cases are coming out from the California divorce court which deal with LGBT marriages and the children from those marriages and partnerships. If you are in a same sex marriage or in a domestic partnership, we should plan on talking about assets and children and how we will provide for them from your perspective.
Call Sirkin Law Group to talk about wealth planning for your family and personal affairs, and how to unblend the estate plan for success. Call Mina Sirkin, Board Certified Specialist Attorney in California Trust Law at 818.340.4479 for unblended estate advice for blended families.