Estate planning for blended families

What people in second marriages should consider when making their wills

Elissa

By

Elissa Suh

Elissa Suh

Personal Finance Editor

Elissa Suh is a senior editor of estate planning at Policygenius in New York City. She has researched and written extensively about wills, trusts, and personal finance since 2019, with an eye towards making difficult (and at times gloomy) topics easy to understand for readers. Her articles and data stories has been cited by the likes of MarketWatch, CNBC, PBS, Inverse, The Philadelphia Inquirer, and more.

Published April 27, 2021|5 min read

Policygenius content follows strict guidelines for editorial accuracy and integrity. Learn about our

editorial standards

and how we make money.

Key Takeaways

  • With a blended family, you need to consider what happens to a spouse and children, including step children and children from previous marriage

  • You can write a will to make specific bequests to your chosen beneficiaries instead of leaving everything to your surviving spouse and trusting that they’ll do what you want

  • Since their situation can be complex, people with blended families may need to consult with an estate lawyer

Everyone can benefit from creating an estate plan, but people with blended families especially need one. If you die without a will, a large portion of your estate typically goes to your current spouse who survives you — the exact amount is determined by state law, and it may not be what you wanted if you had a particular plan for giving away your assets. Your stepchildren, for example, don’t typically have the right to inherit, unless they are legally adopted. 

People with blended families may be divorced and remarried or have children from previous marriage, and they need to take certain considerations when writing a will or opening a trust to make sure the right people and loved ones are provided for in the future.

How do you split an estate in a blended family?

There is no definitive answer on how an estate should be divided amongst a blended family. It’s up to each individual spouse to discuss how they want to receive their money and assets and come to an understanding about how they want to approach the future. In many cases, each spouse may have their own distinct goals and needs — like different beneficiaries they want to provide for — which can be accommodated with proper estate planning. If your family structure is complex, you can benefit from finding an estate lawyer to help you.

Create your will from just $150

Start now

What could go wrong: Common pitfalls for blended families

When it comes to passing down assets with a blended family, there are as many different ways for things to go wrong after you die as there are different types of family setups.

Mainly, you want to make sure that your estate plan doesn’t leave loved ones dissatisfied with how your money and assets are divided between them. You don't want your beneficiaries to receive a smaller inheritance than they feel they deserve, or worse — for them not to inherit anything at all, which could happen if you give everything to your spouse. 

It’s common for people to leave everything to their spouse. However, if you remarried, there are a number of reasons why you may not want to. To use an extreme example, giving everything to your new spouse could result in them disinheriting your children. The surviving spouse could favor the needs of their own children from a previous marriage or a new one and use the money you leave behind on them instead of the kids you had together. It’s also possible your spouse ends up spending all the estate funds so there simply is nothing left for anyone else.

Improper estate planning can also affect grandchildren. If you don’t have a blended family, one of your children might. Let’s say you left an inheritance for your daughter who is in her second marriage and has children from her first. When she dies, her estate may pass to her spouse, even if you had intended that the money you gave her be used for your grandchildren. 

Be specific with blended family wills

If you have a blended family, you can write a will that spells out your exact wishes. Instead of leaving everything to your surviving spouse, who can then use the assets however they wish, you can make specific bequests to your chosen beneficiaries, whether they are biological children or stepchildren (or even siblings, more distant relatives, and non-blood relations all together). 

People who are remarried should be careful about creating a single will together, called a joint will, since it can’t be changed without the consent of both spouses

In community property states, spouses jointly own assets acquired during the marriage, so considerations must be taken if they have different beneficiaries in mind.

Guardianship

If you pass away and have a minor child, the surviving biological parent typically becomes the sole guardian. If you’re remarried and want your spouse to act as the guardian of your child from a previous marriage or have any sort of parental rights, you may need to talk with a lawyer because the states typically prefer a blood relation to act as guardian. 

Trusts are especially beneficial for remarried spouses

There are many different types of trusts out there, many of which can benefit blended families. A trust can be tailored to meet your needs and particular situation, since you get to decide who the beneficiaries are, how much they inherit, and when or under what circumstances. 

The person in charge of managing the trust, according to your terms, is called the trustee. The trustee might have their work cut out for them if you establish a complex trust, so make sure you choose someone capable. 

Here are some considerations to take into account when making a trust for a blended family:

  • What assets should your surviving spouse receive and when?

  • What can the surviving spouse use the trust funds for? Certain expenses, or anything they want?

  • Do you have someone in mind to receive the remaining trust assets once the surviving spouse passes away? Do you want the spouse to decide?

  • What assets should your children or stepchildren receive and when?

  • Should your children or stepchildren have access to the trust funds during your surviving spouse’s lifetime or only after they pass away?

Blended families can use revocable or irrevocable trusts, as fit their needs, and they will likely need to hire an estate attorney to help set it up. 

Types of trusts for blended families

  • Family trust: a broad type of trust where the family members are beneficiaries 

  • Spendthrift trust: restricts a beneficiary’s access to money and assets in the trust

  • Marital trust: a trust that’s created for a surviving spouse after one spouse passes away

  • QTIP trust: a type of marital trust that provides for the surviving spouse during their lifetime, but then distributes assets to different beneficiaries of your choosing (like your children from a previous marriage)

Learn more about other types of trusts

Don’t forget about health care decisions

Another part of estate planning involves preparing for what happens if you become incapacitated, or unable to make decisions for yourself. You can choose someone to make decisions by granting them power of attorney, and may be faced with a decision between choosing your new spouse or your children. You can even name them both to act as co-agents who make agreements together, but keep in mind that this could cause more disagreements. 

In any case, it’s also important to write a living will outlining what medical procedures you want, and your agent can use it to guide their decisions. 

Learn more about essential estate planning documents

Update beneficiary designations

Certain assets — like a life insurance policy, retirement account, or bank account —  can transfer directly to beneficiaries outside of a will. If you named a designated beneficiary to one of these assets, which are transferable- or payable on death, be sure to periodically update them as needed.  Beneficiary designations take legal precedence over what’s written in your will. 

Learn more about beneficiary designation vs. a will.