Wills are rarely simple.
Add blended families into the mix and even minor complexities with inheritance planning get incredibly complex.
Not only does a blended family have to deal with the challenges of two sets of children, obligations and requiments from past relationships can cause inter-family tensions that can flare up at any moment.
All this means the wills of both partners in a blended family must be created with the utmost care and consideration so that it doesn’t add more tension to an already challenging time.
To help you understand and navigate the hurdles of inheritance planning for children from blended families we’ll cover some tips and frequently asked questions.
Alleviate anxiety by clearly communicating
One of the most important, and least technical choices you can make when crafting a will (whether you’re in a blended family or not) is to be up front and clear about your intentions.
Communicate to each family member that you care for them and are trying to make the best decisions possible. When members understand they’re loved and that their needs are being considered, it can help alleviate fear, anxiety or other negative feelings that may surface when the will is executed.
What happens to your will after divorce and remarriage?
A divorce affects more than just your marital status – it completely changes how the court reads your will.
If you remarry after a divorce, any will you created before your wedding day is now considered invalid.
If, however, you have not remarried and are simply cohabitating with a new partner, the will is not completely invalid. Instead, it will be read as if you’re ex-spouse is pre-deceased.
That means even if the will hasn’t been updated, all bequests or gifts to your ex-spouse will not be given.
Whether you’ve remarried or not, it’s essential to revisit your will after a divorce to ensure it’s up-to-date and that your estate won’t end up intestate.
Keep your will up-to-date
While your divorce has direct consequences on your will, there are many documents, like power of attorney, that are not affected by divorce. That means if you haven’t updated your documents, you may be leaving a lot of power in your ex-spouse’s hands.
Documents that need to be updated include:
- Power of attorney
- Health directives
- Beneficiaries of life insurance policies and registered savings plans, like RRSPs
The above do not change after a divorce, and they can put blended families in a difficult position if they’re not updated before they are invoked.
Solutions for inheritance in blended families
While it’s important to update your will after a divorce and remarriage, finding a way to make all stakeholders happy can often get quite complicated.
For many married people, leaving everything to your surviving spouse is the default. But with a blended family, children from your previous marriage may not feel comfortable with that, especially if their relationship with your new partner is not strong, like with children who may have moved out before the new partner became a part of your life. Often, these grown children will fear that the new spouse will favour their own children in the disbursement of the estate.
Naturally, this can lead to infighting and conflict.
The good news is, there are established solutions to these potential problems that ensure everyone is satisfied with how the estate is to be shared.
A common tactic of blended families is to name two executors on each partner’s will – one from each side of the blended family. This helps ensure that each side feels represented through the execution of the will.
Pre-nuptial agreements may not fit well into our romantic ideas of love and marriage, but they can be powerful tools for sorting out the complex problems that can crop up in blended families.
With the help of a good lawyer, you and your soon-to-be spouse can add another layer of protection to ensure both families are happy with the inheritance planning.
However, it’s important to remember prenups are not ironclad. Without an up-to-date will, the prenup may not hold up in court.
Mutual wills agreement
Often in second marriages, spouses will have ‘mirror wills,’ that is wills that are essentially identical in all the most important aspects. However, there is no guarantee that everything will stay the same after one partner dies.
So, while a couple may stipulate a 50% split of the estate between the two families when both are alive, the partner who lives longer may choose to change the will after the predeceasing partner is gone.
A Mutual Wills Agreement mimics will mirroring, but adds a layer of legally-binding protection. This ensures that the surviving spouse cannot unilaterally change the will agreement after the death of their partner to better suit their family’s needs,
Setting up a trust
A trust is a powerful tool for inheritance planning and is especially useful for blended families where the spouses have kept their assets separate.
By setting up a spousal or common-law partner trust, you can provide income to the surviving spouse while ensuring the bulk of your estate will end up with your children.
Whether you want all children in the blended family to receive equal inheritance, or you want to focus more on your children, you can use a trust to ensure your will is carried out.