Blended Family Estate Advice

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Windylotus
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Blended Family Estate Advice

Post by Windylotus » Mon Dec 02, 2019 1:56 pm

DW and I are finally getting around to putting a will together. This is long over due. We are empty nesters with five kids total. Three from me and two from her. As we talk about doing a will, the conversation seems to get more complex with a blended family. All our kids get along great and we are one of the lucky ones who have made a blended family work.

We don't want any of our kids burdened in the event of our demise. We also don't want anyone to feel any unequal favoring at the time of asset distributions. Would a trust be the best way to move forward with this? I really don't know anything about trusts. I thought I would reach out to the BH community before I started digging into the subject.

Who out there has a blended family and what have you done in this area of estate planning? Thanks all

~Windy~

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CAsage
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Re: Blended Family Estate Advice

Post by CAsage » Mon Dec 02, 2019 2:15 pm

I think any useful advice you may receive will need a bit more information. Did you and DW blend all your assets? Are there separate assets you wish to designate for separate children? Is there enough money overall to support the surviving spouse and also immediately benefit the first-to-die's children? Do you want to treat them all exactly equal? I think the big fear here, and it's by no means rare, is that the surviving spouse (either deliberately or by later manipulation) ends up favoring a smaller subset of heirs. You need to be clear on your intentions, make sure both of you are on board, and then a good lawyer can help you craft a bullet (and fraud and gold-digger) proof estate plan.
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

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Windylotus
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Re: Blended Family Estate Advice

Post by Windylotus » Mon Dec 02, 2019 2:22 pm

CAsage wrote:
Mon Dec 02, 2019 2:15 pm
I think any useful advice you may receive will need a bit more information. Did you and DW blend all your assets? Are there separate assets you wish to designate for separate children? Is there enough money overall to support the surviving spouse and also immediately benefit the first-to-die's children? Do you want to treat them all exactly equal? I think the big fear here, and it's by no means rare, is that the surviving spouse (either deliberately or by later manipulation) ends up favoring a smaller subset of heirs. You need to be clear on your intentions, make sure both of you are on board, and then a good lawyer can help you craft a bullet (and fraud and gold-digger) proof estate plan.
Yes all our assets are combined. This was our thoughts as well. The surviving spouse will be financially taken care of and can have some say of assets but cannot change things to be more favorable to one child over the other. Our thoughts is the kids won't receive anything until we are both gone.

There may be some minor items we want to designate to specific kids. For example, things from DW grandmother are to go to her daughter etc.

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Re: Blended Family Estate Advice

Post by Flyer24 » Mon Dec 02, 2019 2:23 pm

Topic moved to Personal Finance.

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dm200
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Re: Blended Family Estate Advice

Post by dm200 » Mon Dec 02, 2019 2:24 pm

Windylotus wrote:
Mon Dec 02, 2019 1:56 pm
DW and I are finally getting around to putting a will together. This is long over due. We are empty nesters with five kids total. Three from me and two from her. As we talk about doing a will, the conversation seems to get more complex with a blended family. All our kids get along great and we are one of the lucky ones who have made a blended family work.
We don't want any of our kids burdened in the event of our demise. We also don't want anyone to feel any unequal favoring at the time of asset distributions. Would a trust be the best way to move forward with this? I really don't know anything about trusts. I thought I would reach out to the BH community before I started digging into the subject.
Who out there has a blended family and what have you done in this area of estate planning? Thanks all
~Windy~
No experience with "blended family" but your situation calls for more thought, consideration and added things.

You are not doing "a will", but rather two wills - one for each spouse. The two wills, though, should be very coordinated with each other so that the order of your deaths will not cause a real distortion of what you intend.

Where/how I would start is making a full list of assets (detailed by his/hers/ours), life insurance policies, retirement accounts, pension survivor benefits, full "family tree" of children, grandchildren, etc. - and any others you would want money to go to. Then, make an appointment with an experienced estate planning attorney (for 30-60 minute appointment) to review your situation and get some preliminary ideas/structure of an estate plan that fits your needs and desires. Depending on family details, perhaps discuss some aspects of the estate issues with adult children.

When looking for such an attorney, before doing any business with him/her - I would ask at least these things:
1. Do you do primarily estate type work? [IMO, you always want an attorney who does primarily estate type work]
2. How long have you been doing primarily estate type work? [You do not want someone who just switched to estates two months ago]
3. In your estate work - how often do you recommend and do wills vs. how often trusts (in addition to a will)? [IMO you want an attorney that will recommend and do what fits best for you - not what is best/easiest/most profitable for the attorney]
4. Please describe your typical estate client or types. [IMO, you want an attorney that deals with folks like you. Do NOT ask if he/she deals with folks like you - he/she will always say yes
5. How do you charge for estate work - hourly for everything - fixed price (including client reviews of drafts) - other. [Pros and cons to both methods or other method. We chose an attorney that charged a modest fee for the initial (30-60 minute modest cost consultation. Attorney then made recommendation (or choice of recommendations) with the fixed fee - and that fee included client review of documents and any corrections as well as detailed review/understanding of all aspects of documents.

Some estate planning attorneys offer no charge (or very small charge) group estate information sessions - good way to get to know attorney before making a commitment.

PoppyA
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Re: Blended Family Estate Advice

Post by PoppyA » Mon Dec 02, 2019 2:26 pm

+1 (well said)

What about re-marriage?

It WILL get complicated, count on it.

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dm200
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Re: Blended Family Estate Advice

Post by dm200 » Mon Dec 02, 2019 2:30 pm

Windylotus wrote:
Mon Dec 02, 2019 2:22 pm
CAsage wrote:
Mon Dec 02, 2019 2:15 pm
I think any useful advice you may receive will need a bit more information. Did you and DW blend all your assets? Are there separate assets you wish to designate for separate children? Is there enough money overall to support the surviving spouse and also immediately benefit the first-to-die's children? Do you want to treat them all exactly equal? I think the big fear here, and it's by no means rare, is that the surviving spouse (either deliberately or by later manipulation) ends up favoring a smaller subset of heirs. You need to be clear on your intentions, make sure both of you are on board, and then a good lawyer can help you craft a bullet (and fraud and gold-digger) proof estate plan.
Yes all our assets are combined. This was our thoughts as well. The surviving spouse will be financially taken care of and can have some say of assets but cannot change things to be more favorable to one child over the other. Our thoughts is the kids won't receive anything until we are both gone.
There may be some minor items we want to designate to specific kids. For example, things from DW grandmother are to go to her daughter etc.
So, assuming all assets first go to the surviving spouse.

Then, the issue/risk is that the surviving spouse will, or might, or is "perceived" to - pass most or all assets to his/her children/grandchildren - leaving out the step-children. How important is having some kind of minimum guarantee for all children in the blended family? Seems to me the more the guarantee - the more complex will be the wills/trusts. Also, if the surviving spouse lives for a very long time - you probably do not want him/her to be financially deprived with lots of assets tied up.

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Windylotus
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Re: Blended Family Estate Advice

Post by Windylotus » Mon Dec 02, 2019 2:40 pm

Thank you dm200. Very helpful and gives good food for thought. DW and I will talk more now on the subject.

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dm200
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Re: Blended Family Estate Advice

Post by dm200 » Mon Dec 02, 2019 2:51 pm

Windylotus wrote:
Mon Dec 02, 2019 2:40 pm
Thank you dm200. Very helpful and gives good food for thought. DW and I will talk more now on the subject.
Good Luck!

If you each have 100% confidence that the surviving spouse will treat all children/grandchildren in this blended family fairly and equitably (as you would discuss and agree), then the simplest, least expensive and most flexible way to do this would be to have the surviving spouse's will/trust distribute the remaining assets. Of course, then such a surviving spouse could be free to change the will/trust to be unfair.

If your assets are large enough and the surviving spouse will have sufficient assets/income - then you might consider making gifts, while alive, to such blended family members.

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Sandtrap
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Re: Blended Family Estate Advice

Post by Sandtrap » Mon Dec 02, 2019 3:28 pm

Read: "Beyond The Grave" by Condon
https://smile.amazon.com/Beyond-Grave-R ... 394&sr=8-2

Many here have gotten useful information from this book.
Some have not needed it.
Check the link and see if it might work for you.
It does address: "blended families".

j :happy
Wiki Bogleheads Wiki: Everything You Need to Know

aristotelian
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Re: Blended Family Estate Advice

Post by aristotelian » Mon Dec 02, 2019 5:06 pm

The lawyers on here may disagree but I don't see trusts removing any challenges with hurt feelings etc. How complex is the estate and/or needs of the kids? It would be helpful to know what issues you have in mind.

bsteiner
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Re: Blended Family Estate Advice

Post by bsteiner » Mon Dec 02, 2019 5:25 pm

One way is to have an agreement that says that you each agree to provide equally for each of the five children, both as to gifts and your estates. You might exclude annual exclusion gifts and nontaxable tuition and medical expenses. For this purpose, a "child" would include the child's issue, or trusts for the benefit of the child or his/her issue, so that you could each provide for them in whatever way makes the most sense.

Another way is to provide for her in trust, and provide that the balance at her death goes by formula to equalize your children if she makes gifts to her children after your death or leaves a larger share of her estate to her children.

MP173
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Re: Blended Family Estate Advice

Post by MP173 » Mon Dec 02, 2019 5:44 pm

DW and I addressed this issue earlier this year.

Second marriage for both of us. She is divorced, I am a widow. We each have 2 adult children. We had a pre-nup prior to our marriage.

She has "her assets", I have "my assets" and we have "our assets". Financial protection for her was my first objective with pass down to my sons the secondary. For her it was pass down to her children as the primary objective. I have no issue with my deceased wife's assets (in form of life insurance benefits and IRA) being passed to my sons. Nor do I have an issue with her assets from her marriage passing to her children. There are enough "joint assets" along with life insurance to protect her.

I am still employed and use life insurance as a major benefit for her. At the time of my retirement, we will visit the attorney again.

A good estate attorney is necessary. Sit and discuss prior to meeting with attorney what you both are concerned with and how to best address your concerns. Your attorney will want detailed information on your assets, liabilities, etc.

This is a great way to make sure you are protecting your family members and take a very detailed inventory of your assets at this time.

Ed

delamer
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Re: Blended Family Estate Advice

Post by delamer » Mon Dec 02, 2019 6:14 pm

What is the level of your joint assets?

An $800,000 estate probably should be handled differently than a $8,000,000 estate.

I’d urge you — to the extent feasible — to make gifts to all the kids now, rather than than having them wait until you are both gone.

illumination
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Re: Blended Family Estate Advice

Post by illumination » Mon Dec 02, 2019 11:09 pm

I definitely would not just leave it up to the other spouse to make sure the assets are divided fairly in a blended family situation. These things can get really nasty, and even if it is done fairly, there will be accusations.

And people get married well later in life also for a 3rd time, so imagine someone that's say twice removed like a step parent that remarries. What are the odds the original biological kids see much of that estate unless it's spelled out beforehand?

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celia
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Re: Blended Family Estate Advice

Post by celia » Tue Dec 03, 2019 2:44 am

Are you thinking of leaving things to all 5 kids the same as if all of them belonged to both of you? If so, what is the problem you see?

One big issue to consider in any marriage, is what do you want to happen after the first person dies? If the survivor remarries, what will happen to the assets of the first deceased? Then, what will happen to assets of the second spouse to die if their later spouse survives them? I see scenarios where the assets end up with the later-added spouse. The person who remarries will probably want the later spouse to be cared for, while the kids may see their inheritance disappear.

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Re: Blended Family Estate Advice

Post by JGoneRiding » Tue Dec 03, 2019 10:19 am

Ianal but if you want to guarantee that your kids get something you will need a trust of some sort. A qtip or an a/b triggering trust that locks up your share of the assets.

No matter what you do "fair" to all 6 heirs is unlikely.

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dm200
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Re: Blended Family Estate Advice

Post by dm200 » Tue Dec 03, 2019 12:25 pm

JGoneRiding wrote:
Tue Dec 03, 2019 10:19 am
Ianal but if you want to guarantee that your kids get something you will need a trust of some sort. A qtip or an a/b triggering trust that locks up your share of the assets.
No matter what you do "fair" to all 6 heirs is unlikely.
it seems to me that some sort of "flexibility" would be very desirable to make things more fair and equitable based on changes in circumstances.

For example, suppose there are four children (now adults - Chris, Pat, Robin and Kelly) and you just have the trust provide equal shares. OK, you die and each gets 1/4.

BUT - suppose - before you die and before you can or do update the trust - Pat (who has three children and is financially challenged) dies. Each of Chris, Robin and Kelly each get 1/3. Pat's children/family get nothing. If the other three surviving siblings are all fair and loving and caring, perhaps they might provide part of their share to Pat's family. However, the three siblings might very well be very estranged from Pat and his/her family.

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Michael Patrick
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Re: Blended Family Estate Advice

Post by Michael Patrick » Tue Dec 03, 2019 12:38 pm

My Dad had five kids, his second wife had four. They combined all of their assets when they got married.

Their wills were structured so that all of the assets passed to the surviving spouse, and then whatever was left of the assets was divided into nine equal shares on the death of the surviving spouse. His wife preceded him in death, and he passed away a few years later.

The only exception was my Dad's share in the family land and cabins in the UP, which was placed into a trust with me and my siblings each owning one fifth.

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dm200
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Re: Blended Family Estate Advice

Post by dm200 » Tue Dec 03, 2019 12:51 pm

Maybe one way to be "fair" is to die without assets. :)

True story - My wife has one sister. Her late mother had very modest assets at her death and her will split her assets equally between my wife and her sister. However, about half of my late mother-in-law's assets - at the time of her death - were in a bank account (or accounts). For "convenience" my late mother-in-law added my wife's sister as a joint owner of the bank account(s) - since we live a long distance away and my wife's sister was local. These joint bank account(s) would pass automatically to the joint owner (my sister-in-law) - and then, according to the will my sister-in-law would get half of the remaining assets. So - that meant my wife would get 1/4 of her mother's assets and my sister-in-law would get 3/4.

Immediately, without any controversy at all, my sister-in-law recognized that it was her late mother's clear intention that the two daughters would share all of the assets equally - and consulted the attorney engaged for final settlement of the estate. My sister-in-law then directed the estate attorney to arrange that each sister received the same amount. My sister-in-law also knew that there was no justifiable reason for her to get more - even though she could have done so.

Everybody was happy and satisfied. Unfortunately, not all siblings/families have the same type attitude.
Last edited by dm200 on Tue Dec 03, 2019 1:02 pm, edited 1 time in total.

bayview
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Re: Blended Family Estate Advice

Post by bayview » Tue Dec 03, 2019 1:00 pm

Windylotus wrote:
Mon Dec 02, 2019 1:56 pm
DW and I are finally getting around to putting a will together. This is long over due. We are empty nesters with five kids total. Three from me and two from her. As we talk about doing a will, the conversation seems to get more complex with a blended family. All our kids get along great and we are one of the lucky ones who have made a blended family work.

We don't want any of our kids burdened in the event of our demise. We also don't want anyone to feel any unequal favoring at the time of asset distributions. Would a trust be the best way to move forward with this? I really don't know anything about trusts. I thought I would reach out to the BH community before I started digging into the subject.

Who out there has a blended family and what have you done in this area of estate planning? Thanks all

~Windy~
Do you have enough assets that you can split them up, with one portion enough for the surviving spouse, and the rest that can be divided 5 ways (or however else) and distribute to the kids immediately? Then the only portion of the assets that might be vulnerable to surviving spouse's decisions would be that which was left specifically to him/her.

This can work especially if each of you have separate assets - his, hers, and ours - and if the his/hers plus a portion of ours when first spouse dies is enough for the surviving spouse.
The continuous execution of a sound strategy gives you the benefit of the strategy. That's what it's all about. --Rick Ferri

stockrex
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Re: Blended Family Estate Advice

Post by stockrex » Tue Dec 03, 2019 1:06 pm

Michael Patrick wrote:
Tue Dec 03, 2019 12:38 pm
My Dad had five kids, his second wife had four. They combined all of their assets when they got married.

Their wills were structured so that all of the assets passed to the surviving spouse, and then whatever was left of the assets was divided into nine equal shares on the death of the surviving spouse. His wife preceded him in death, and he passed away a few years later.

The only exception was my Dad's share in the family land and cabins in the UP, which was placed into a trust with me and my siblings each owning one fifth.
Do you think you need to take care of your children from 1st wife first?

Your step children will have their father's estate in addition to yours.

It does not matter how you skin the cat you will hurt feelings, but from the above my fellow michigander, would you split the cabin 9 ways?

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Michael Patrick
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Re: Blended Family Estate Advice

Post by Michael Patrick » Tue Dec 03, 2019 1:11 pm

dm200 wrote:
Tue Dec 03, 2019 12:51 pm
Maybe one way to be "fair" is to die without assets. :)

True story - My wife has one sister. Her late mother had very modest assets at her death and her will split her assets equally between my wife and her sister. However, about half of my late mother-in-law's assets - at the time of her death - were in a bank account (or accounts). For "convenience" my late mother-in-law added my wife's sister as a joint owner of the bank account(s) - since we live a long distance away and my wife's sister was local. These joint bank account(s) would pass automatically to the joint owner (my sister-in-law) - and then, according to the will my sister-in-law would get half of the remaining assets. So - that meant my wife would get 1/4 of her mother's assets and my sister-in-law would get 3/4.

Immediately, without any controversy at all, my sister-in-law recognized that it was her late mother's clear intention that the two daughters would share all of the assets equally - and consulted the attorney engaged for final settlement of the estate. My sister-in-law then directed the estate attorney to arrange that each sister received the same amount. My sister-in-law also knew that there was no justifiable reason for her to get more - even though she could have done so.

Everybody was happy and satisfied. Unfortunately, not all siblings/families have the same type attitude.
My Dad did something similar. While the will specified that everything be split evenly between the nine kids in the blended family, for whatever reason on his IRA he put as beneficiaries my older brother and one of his wife's daughters, who were the executors on the estate. Since there was a beneficiary designation, the distribution never made it into the estate, one half went directly to each of the beneficiaries.

My brother wrote a check for for 1/5 of the amount he received to each of his siblings, even though he was under no obligation to do so. I have no idea whether the other half was shared on the other family's side.

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Michael Patrick
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Re: Blended Family Estate Advice

Post by Michael Patrick » Tue Dec 03, 2019 1:16 pm

stockrex wrote:
Tue Dec 03, 2019 1:06 pm
Michael Patrick wrote:
Tue Dec 03, 2019 12:38 pm
My Dad had five kids, his second wife had four. They combined all of their assets when they got married.

Their wills were structured so that all of the assets passed to the surviving spouse, and then whatever was left of the assets was divided into nine equal shares on the death of the surviving spouse. His wife preceded him in death, and he passed away a few years later.

The only exception was my Dad's share in the family land and cabins in the UP, which was placed into a trust with me and my siblings each owning one fifth.
Do you think you need to take care of your children from 1st wife first?

Your step children will have their father's estate in addition to yours.

It does not matter how you skin the cat you will hurt feelings, but from the above my fellow michigander, would you split the cabin 9 ways?
All of the nine children were adults when they got married.

Even before my Dad got remarried, it was his stated intention that his share in the cabins would go to me and my siblings. His will reflected his intentions, and it was obviously OK with his second wife since her will was in agreement with that. I don't think any of her kids had ever even been to the cabin.

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Watty
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Re: Blended Family Estate Advice

Post by Watty » Tue Dec 03, 2019 1:26 pm

Windylotus wrote:
Mon Dec 02, 2019 1:56 pm
Who out there has a blended family and what have you done in this area of estate planning? Thanks all
It was not me but I know of a situation where this happened with a seven figure estate;

1) Retired couple with a seven figure estate, the husband dies.

2) A few years later the wife remarries a man that was also widowed and had kids of their own.

3) They write their wills so that when one of them dies the survivor would get the money but their will was set up so that when the second of them dies both sets of their kids get a fair distribution of the estate.

4) The wife dies a few years later. Second husband gets everything.

5) The second husband rewrites his will so that his kids will get everything.

6) Second husband dies a few years later and his kids get everything.

7) The original couples kids get nothing, they check with a lawyer and there is nothing that can be done even though there is some question that the wife may have had early dementia(without a firm diagnosis) and the second husband was controlling and abusive. The police had been called for domestic disturbances several times but there was never an arrest.

8) The original couples kids have to fight the other kids to even get things like family photos out of the house. The second husbands kids though that if they let them have things like family photos that might give them a better claim on the money.

This is not a situation where you want to get some generic wills or use software to do it yourself. It would likely make sense to have a lawyer draw up some sort of trust to make sure that there are not unexpected problems with your estate.

delamer
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Re: Blended Family Estate Advice

Post by delamer » Tue Dec 03, 2019 1:46 pm

dm200 wrote:
Tue Dec 03, 2019 12:25 pm
JGoneRiding wrote:
Tue Dec 03, 2019 10:19 am
Ianal but if you want to guarantee that your kids get something you will need a trust of some sort. A qtip or an a/b triggering trust that locks up your share of the assets.
No matter what you do "fair" to all 6 heirs is unlikely.
it seems to me that some sort of "flexibility" would be very desirable to make things more fair and equitable based on changes in circumstances.

For example, suppose there are four children (now adults - Chris, Pat, Robin and Kelly) and you just have the trust provide equal shares. OK, you die and each gets 1/4.

BUT - suppose - before you die and before you can or do update the trust - Pat (who has three children and is financially challenged) dies. Each of Chris, Robin and Kelly each get 1/3. Pat's children/family get nothing. If the other three surviving siblings are all fair and loving and caring, perhaps they might provide part of their share to Pat's family. However, the three siblings might very well be very estranged from Pat and his/her family.
I can’t imagine a competent attorney who wouldn’t write the trust provisions so that Pat’s share would go to her/his children.

This is known as “per stirpes:” https://www.thebalance.com/per-stirpes- ... ls-3505583

mptfan
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Re: Blended Family Estate Advice

Post by mptfan » Tue Dec 03, 2019 1:52 pm

The biggest risk you have to address is the situation that Watty described a couple of posts above. I know, I know, you trust your wife to take care of your kids if you die first, but you don't really know what would happen, especially if she becomes mentally not fully aware or succeptible to being influenced by others who have different motivations or if she remarries. Things will change and people will change after you are dead and there will be nothing you can do about it.

If I were in your situation, I would provide for your kids directly upon your death, either by setting them up as account beneficiaries or through your will, and I would not accept any other alternative that delayed the passage of assets to your kids after your death to a later event, not even a trust, because things can change and people can change after you die and before the assets pass, not to mention the assets can be spent or sold or transferred after you die and before they pass to your kids.
Last edited by mptfan on Tue Dec 03, 2019 2:15 pm, edited 5 times in total.

delamer
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Re: Blended Family Estate Advice

Post by delamer » Tue Dec 03, 2019 1:57 pm

Watty wrote:
Tue Dec 03, 2019 1:26 pm
Windylotus wrote:
Mon Dec 02, 2019 1:56 pm
Who out there has a blended family and what have you done in this area of estate planning? Thanks all
It was not me but I know of a situation where this happened with a seven figure estate;

1) Retired couple with a seven figure estate, the husband dies.

2) A few years later the wife remarries a man that was also widowed and had kids of their own.

3) They write their wills so that when one of them dies the survivor would get the money but their will was set up so that when the second of them dies both sets of their kids get a fair distribution of the estate.

4) The wife dies a few years later. Second husband gets everything.

5) The second husband rewrites his will so that his kids will get everything.

6) Second husband dies a few years later and his kids get everything.

7) The original couples kids get nothing, they check with a lawyer and there is nothing that can be done even though there is some question that the wife may have had early dementia(without a firm diagnosis) and the second husband was controlling and abusive. The police had been called for domestic disturbances several times but there was never an arrest.

8) The original couples kids have to fight the other kids to even get things like family photos out of the house. The second husbands kids though that if they let them have things like family photos that might give them a better claim on the money.

This is not a situation where you want to get some generic wills or use software to do it yourself. It would likely make sense to have a lawyer draw up some sort of trust to make sure that there are not unexpected problems with your estate.
This scenario also can occur with one bad actor who gets involved after the death of the first spouse. For instance, a child of the survivor who has financial problems gets the survivor to rewrite his/her will to exclude the stepchildren because the survivor is threatened with losing access to that child’s kids (survivor’s grandchildren).

I’ve seen inheritance/end-of-life situations where people behaved really ethically and I’ve seen situations where people behaved really poorly. You can’t control everything from your death bed or from the grave, but you shouldn’t assume that everyone will honor your spoken wishes. Put it in (binding) writing.
Last edited by delamer on Tue Dec 03, 2019 4:10 pm, edited 1 time in total.

mptfan
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Re: Blended Family Estate Advice

Post by mptfan » Tue Dec 03, 2019 1:59 pm

delamer wrote:
Tue Dec 03, 2019 1:57 pm
I’ve seen inheritance/end-of-life situations where people behaved really ethically and I’ve seen situations where people behaved really poorly. You can’t control everything from your death bed or from the grave, but you shouldn’t assume that everyone will honor your spoken wishes. Put it in writing.
I agree, but putting it in writing is not good enough because after you are dead people can ignore the writing and do what they want, or the money can be spent and your heirs effectively would have no recourse. Sure, maybe they could sue, but if the money is gone, what does that accomplish?

PoppyA
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Re: Blended Family Estate Advice

Post by PoppyA » Tue Dec 03, 2019 3:34 pm

One spouse dies, as they age the surviving spouse turns over their affairs to a child, will the child be faithful?

WhiteMaxima
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Re: Blended Family Estate Advice

Post by WhiteMaxima » Tue Dec 03, 2019 4:14 pm

Gift your money now instead of waiting. I would do lump sum 529 plan for your children or grandchildren.

NewMoneyMustBeSmart
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Re: Blended Family Estate Advice

Post by NewMoneyMustBeSmart » Tue Dec 03, 2019 4:43 pm

Windylotus wrote:
Mon Dec 02, 2019 1:56 pm
Who out there has a blended family and what have you done in this area of estate planning? Thanks all
I do. My spouse had kids and I do not.

We put everything in a living trust. If/when I die, my half of the trust goes into an irrevocable trust that goes for her Health Education Support and Maintenance ("HESM") and then on her death goes to her kids.

If/when she dies and I survive her, we carve out X% or $Y of her half and put that in a irrevocable children's trust that goes for her kid's HESM until the youngest is mid-20s and then it trifurcates into 3 trusts for their estate.

The excess of her half (less the X% or $Y) goes into a irrevocable SPOUSAL-TRUST that goes for my HESM and when I die goes to the kid's trusts.

One of the scenarios we thought about has to do that they are her biological kids; and if I die, I'm done, she gets it all and will give it to her kids, or find a boy toy and spend it on him.

If she dies, we want to preserve money for her kids no matter what I do. So in the degenerate case, if she dies, I could take all her money and spend it on a new bimbo and have kids with new bimbo and cut out her kids. So, by carving out money immediately exclusive of my support, that reserves some for the kids.

Frankly she and I are not entirely aligned on if/how we want the kids to know about or have money, as that's a big risk.

The book Beyond The Grave https://www.amazon.com/Beyond-Grave-Rev ... B00LEYI4S6 helped us think through many scenarios, as well as a good estate attorney, whom I can recommend if you PM me.

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LilyFleur
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Re: Blended Family Estate Advice

Post by LilyFleur » Tue Dec 03, 2019 4:51 pm

One spouse dies, the other remarries. Spends all the assets on nursing home care for new spouse. Children then have to pay for care for their own parent. No inheritance.

My parents' trusts did have language in them about remarriage and giving money to the new spouse.

I am single, and will likely stay single. It's a can of worms. My children's father has remarried, and none of us believe my children will receive anything from that side in terms of inheritance.

JGoneRiding
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Re: Blended Family Estate Advice

Post by JGoneRiding » Tue Dec 03, 2019 6:01 pm

dm200 wrote:
Tue Dec 03, 2019 12:25 pm
JGoneRiding wrote:
Tue Dec 03, 2019 10:19 am
Ianal but if you want to guarantee that your kids get something you will need a trust of some sort. A qtip or an a/b triggering trust that locks up your share of the assets.
No matter what you do "fair" to all 6 heirs is unlikely.
it seems to me that some sort of "flexibility" would be very desirable to make things more fair and equitable based on changes in circumstances.

For example, suppose there are four children (now adults - Chris, Pat, Robin and Kelly) and you just have the trust provide equal shares. OK, you die and each gets 1/4.

BUT - suppose - before you die and before you can or do update the trust - Pat (who has three children and is financially challenged) dies. Each of Chris, Robin and Kelly each get 1/3. Pat's children/family get nothing. If the other three surviving siblings are all fair and loving and caring, perhaps they might provide part of their share to Pat's family. However, the three siblings might very well be very estranged from Pat and his/her family.
This situation is actually the easiest to deal with
They call it per stripes. It means Pat's share would go automatically to her direct heirs.

Harder to deal with Bob and Judy have 5 kids 2 his 3 hers. He came into marriage with 2 mil and her with little. She nurses him through long illness and he dies. He leaves "his" kids 1 mil outright she runs out of money
Or b he leaves it all to her she dies with 3 mil (cause it grew and she spent little) but leaves it all to her kids. This situation is very tough.

delamer
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Re: Blended Family Estate Advice

Post by delamer » Tue Dec 03, 2019 7:22 pm

mptfan wrote:
Tue Dec 03, 2019 1:59 pm
delamer wrote:
Tue Dec 03, 2019 1:57 pm
I’ve seen inheritance/end-of-life situations where people behaved really ethically and I’ve seen situations where people behaved really poorly. You can’t control everything from your death bed or from the grave, but you shouldn’t assume that everyone will honor your spoken wishes. Put it in writing.
I agree, but putting it in writing is not good enough because after you are dead people can ignore the writing and do what they want, or the money can be spent and your heirs effectively would have no recourse. Sure, maybe they could sue, but if the money is gone, what does that accomplish?
By writing, I met a legally binding trust, will, etc.

Although, ultimately, I agree that people with bad intentions often are able to circumvent even the best planning.

The trusts all seem to have a “health, education, maintenance, and support” clause for the surviving spouse. But what’s to prevent the survivor from spending down his/her personal funds or income on Porsches, world travel, and gifting to his/her biological children? And then going to the trust get money to pay the rent, medical bills, and other necessities, and so leaving very little for the deceased spouse’s kids?

mptfan
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Re: Blended Family Estate Advice

Post by mptfan » Tue Dec 03, 2019 7:43 pm

delamer wrote:
Tue Dec 03, 2019 7:22 pm
The trusts all seem to have a “health, education, maintenance, and support” clause for the surviving spouse. But what’s to prevent the survivor from spending down his/her personal funds or income on Porsches, world travel, and gifting to his/her biological children? And then going to the trust get money to pay the rent, medical bills, and other necessities, and so leaving very little for the deceased spouse’s kids?
Exactly.

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Summit111
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Re: Blended Family Estate Advice

Post by Summit111 » Tue Dec 03, 2019 9:15 pm

Second marriage for both of us. We both had relatively equal assets at the time of the marriage, Including paid for houses for both of us. She has two grown children from a previous marriage, and I have three grown children from a previous marriage.

We entered into a prenup agreement, stating that the assets we individually brought to the marriage, remain our individual property. We also kept both of the paid for houses, and use them both. One we live in during the week, and the other one in the country for a weekend getaway.

We have one joint account to pay for living expenses, travel, insurance etc. The other accounts, remain in our individual names. Our wills state that upon death, my children would inherit my assets, and my house. Her children would inherit her assets and her house. The wills also state that she has life estate use of my house, and I have life estate use of her house.

We have sufficient individual pensions and assets to survive without the others. We have reviewed the prenup and wills with all of the kids, and they agree.

Neither one of us would have entered into any marriage to a person that did not have relatively equal assets. We have seen numerous situations that could have been avoided with proper planning.

Summit
“Got my mind on my money, and my money on my mind!” Snoop Dog

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LilyFleur
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Re: Blended Family Estate Advice

Post by LilyFleur » Wed Dec 04, 2019 6:51 pm

delamer wrote:
Tue Dec 03, 2019 7:22 pm
mptfan wrote:
Tue Dec 03, 2019 1:59 pm
delamer wrote:
Tue Dec 03, 2019 1:57 pm
I’ve seen inheritance/end-of-life situations where people behaved really ethically and I’ve seen situations where people behaved really poorly. You can’t control everything from your death bed or from the grave, but you shouldn’t assume that everyone will honor your spoken wishes. Put it in writing.
I agree, but putting it in writing is not good enough because after you are dead people can ignore the writing and do what they want, or the money can be spent and your heirs effectively would have no recourse. Sure, maybe they could sue, but if the money is gone, what does that accomplish?
By writing, I met a legally binding trust, will, etc.

Although, ultimately, I agree that people with bad intentions often are able to circumvent even the best planning.

The trusts all seem to have a “health, education, maintenance, and support” clause for the surviving spouse. But what’s to prevent the survivor from spending down his/her personal funds or income on Porsches, world travel, and gifting to his/her biological children? And then going to the trust get money to pay the rent, medical bills, and other necessities, and so leaving very little for the deceased spouse’s kids?
That is where paying a bank/corporate trustee can be worth the 1% per year. If the trust is well-written, defining the types of expenses the survivor may spend on, the corporate trustee will be very strict in adhering to the terms of the trust before giving disbursements.

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