What is a blended family?

It is becoming increasingly common for couples to marry with one or both parties having children from a previous relationship. They may also go on to have children together. This is known as a blended family.

How having a blended family affects estate planning

Couples in blended families often face complex estate planning challenges, such as the dilemma of providing for their partner should they die first whilst also ensuring their own children will inherit their estate. They may have assets which they have brought into the relationship that they wish to ringfence for their own children.

Without professional advice, blended families face the risk of costly legal disputes and the breakdown of family relationships. A professionally drafted Will can help reduce this risk and ensure that the right balance is achieved between providing fairly for all the children of the family and the surviving partner.

The importance of making a Will

Dying without a properly drafted Will can cause real issues for those left behind. If you die without leaving a Will, the rules of intestacy decide who inherits your estate.

In a blended family situation, failure to make a Will can lead to the children of either party being disinherited.

Example

Mr & Mrs Jones die without making Wills. Both have children from previous relationships. Mr Jones dies first with an estate worth £260,000 which passes to Mrs Jones under the rules of intestacy. On Mrs Jones’ death, her estate including the £260,000 she inherited from Mr Jones passes to her own children and Mr Jones’ children receive nothing.

The risks of a straightforward Will

Many couples make simple “mirror Wills” leaving everything to the survivor when the first partner passes away with everything to be divided between their children on the survivor’s death. This is not always the most appropriate type of Will, particularly in a blended family.

• mirror Wills leave a lot to trust and there is the risk that the survivor could change their Will to disinherit the children of the first to die;
• one party may have contributed a larger share of the assets and may not wish for the assets to be divided equally between all the children of the family;
• the assets could reduce over time leaving less for the children to inherit, for example, the survivor could go into long term care or go on a spending spree;
• the survivor may remarry which would automatically revoke the previous Will and without making a new Will, there is the risk that the assets end up with the new spouse and their family.

The advantage of Will Trusts

Will trusts are often seen as a solution for blended families. There are various options available with the most common being the life interest trust.

A life interest trust enables a person to benefit from an asset or income from an estate during their lifetime with the trust property then passing to another beneficiary when the trust comes to an end.

Example

Mr & Mrs Jones are married and both have children from a previous relationship. Mr Jones dies leaving his share of the matrimonial home on a life interest trust allowing Mrs Jones to carry on living there without any interference from Mr Jones’ children. On Mrs Jones’ death, the trust would come to an end and Mr Jones’ half share of the property would pass to his own children. Mrs Jones has a home for the rest of her life whilst Mr Jones’ children are guaranteed to inherit Mr Jones’ half share of the property.

It is important to obtain specialist advice when creating such a trust as there are various points to consider such as:

• who are to be appointed as the trustees;
• which assets are to form part of the trust;
• when is the trust to end, for example, only on the death of the surviving spouse or also if the survivor were to remarry or go into care;
• whether the surviving spouse is to be able to transfer the trust to another property, for example, if they wish to move area or downsize;
• who is to be responsible for the bills, insurance, maintenance and repair;
• the tax implications of such a trust.

For specialist advice, contact our private client Solicitor Carys Jenkins today on 01492 876354 or by emailing carys.jenkins@boneandpayne.co.uk