Estate Planning for Blended Families, Part 1

Estate planning is more complex for blended families, both legally and emotionally.

Blended families have become a common family unit in the United States. The benefits of uniting two families in a mutually supportive and loving home are considerable for all involved, but successfully making that transition includes many considerations beyond the emotional ones. Families must navigate the basics of deciding what physical space they will call home as well as the financial landmines of defining what is “yours, mine, and ours.”

One issue that can be particularly tricky is estate planning. The financial issues of blended families are complex, but the emotional issues around these decisions can be even more intense. They involve the competing interests of your children, your new spouse, and possibly stepchildren or other interested family members. Your failure to adequately address and communicate your estate planning desires may create mistrust and discord between your family members.

Without a proper estate plan, the state’s general intestacy laws control the distribution of your estate. If you die without an estate plan here in Kentucky, your assets are distributed as directed by Kentucky’s intestacy statutes and dower provisions.[I]

Kentucky statutes provide that your spouse inherits one-half of your personal property and one-half of your real property outright. In addition, your spouse takes one-third of your real property in a life estate. The remaining one-sixth of your real property and one-half of your personal property is divided equally between your children, and they have the remainder interest in the spouse’s life estate.

You and your spouse need to communicate your plans effectively to each other and your children. Your failure to do so sets your family up for conflict. For example, even if you put in place an estate plan, your surviving spouse retains their dower rights absent a valid prenuptial or postnuptial agreement. Suppose your estate plan results in the surviving spouse receiving less value than their dower right. In that case, they may renounce the provisions of your will related to their benefits and take an “elective share” equivalent to their dower right. The option to renounce and take dower share should not come as a surprise to your spouse or your children.

In my next blog entry, we’ll examine some concrete steps you can take to avoid such family conflict.

[i] Kentucky is one of only three states that retain dower rights for spouses. The other two states retaining dower rights are Ohio and Arkansas.