Common estate planning pitfalls for blended families
Second marriages are not uncommon in British Columbia. Despite this, blended families are often not considered in typical estate planning advice. It is important that individuals who have stepchildren, children from multiple relationships or any other blended-family arrangement take special care to make plans that work for their family structure.
Here are some of the most common mistakes when it comes to estate planning for blended families:
- Not updating beneficiaries: Beneficiaries are named on an individual’s will, as well as possibly listed on bank accounts. Both need to be updated following a divorce and remarriage to ensure assets are passed to the intended individual. Life insurance beneficiaries should also be reviewed.
- Considering all beneficiaries as a group: In a blended family in particular, relationships between parent and child (or stepchild) can vary. Should stepchildren receive the same inheritance as biological children? Or, what is needed for a dependent child versus a grown and independent one? What about grandchildren? While a simple “splitting everything evenly” approach may work for some families, it is not the best approach for all.
- Ignoring family heirlooms in the will: Many people will choose to leave all assets to their spouse after they pass, or else split evenly between all children including stepchildren. When making this decision, however, it is a good idea to think hard about any family heirlooms that should go to a particular person. Is there a grandmother’s ring, for example, that should specifically go to a descendant from that family? A piece of art precious to one child in particular? Detailing these things in a will can prevent them from being argued over after one’s passing.
Successful estate planning and administration is certainly possible for blended families. However, to enable this, some extra thought and planning is often needed. Those with questions about estate planning for a blended family can get help from a British Columbia estate planning lawyer.