Estate Planning for Blended families: Have step-children or a step-parent? Are you one? How to avoid (unintentionally) disinheriting your family

Estate planning presents unique issues for blended families.  Blended families are families in which one or both parents have children from a previous relationship.  The problem comes when one spouse dies without an estate plan, or an old or outdated one.  Generally, when spouses hold property in California (or anywhere in the US), they hold it in joint tenancy.  When one joint tenant dies, the other one gets the entire property.

Can you see where we’re going with this?

When one spouse of a blended family dies, then the other spouse generally gets all the property of the couple, often by default.  When it comes time to distribute the assets at the death of the second spouse, the second spouse can essentially disinherit the first spouse’s children.  The second spouse, with all the property in his/her name, has control over the ultimate disposition of the property.  If there is a family rift between the second spouse and the step-children, if the second spouse is negligent in creating an estate plan providing for the step-children, or in other cases, then the children of the first spouse to die can be left out in the cold.

Don’t leave your children out in the cold by failing to provide for them with an estate plan. Contact us today to schedule your FREE estate planning consultation.

What is a revocable living trust?

Here is a video on what a revocable living trust is, and why you would want one.  As the centerpiece of my comprehensive estate plans, the living trust allows your estate to pass to your heirs without the hassle and expense of probate.  In California, an estate worth $100,000 or more gross (the total value of your estate not taking any debt into account) is going to probate.  Probate is the court process of assessing your property, paying your debts, and distributing the reminder of your estate to your heirs.  The problem with the probate process is that it can take years to complete (all the while your property is tied up in court), can cost 8-10% of your gross estate (just think – if you just have a house worth $400,000, the total probate fees could cost up to $40,000!), and is a public process.  I’ll be posting another video on probate and why we want to avoid it.  A living trust avoids probate – your estate passes without any courts or lawyers or judges.  This is critical to protect your loved ones and your estate once you’ve passed on.