If you are part of a blended family, you should consider how that might impact your estate plan. You or your spouse may have different priorities and obligations in the event of the death of one of you. In order to avoid conflict between surviving family members, it is important to document your wishes in signed, legal documents to ensure your plan is clear and can be put into place by your estate trustee.
Below you will find some things to consider when engaging in estate planning as part of a blended family:
- Obtain advice from a lawyer on what your obligations for support may be in the event of your death. Do you have children or a former spouse who are entitled to support? How does your obligation to support a first family coincide with your obligations to a second family? This information should be incorporated into your estate plan to avoid costly litigation against your estate.
- Consider what legal documents you should have in place to prevent claims against your estate. For example, you should consider the need for a Separation Agreement with your former spouse (for common law and married spouses), as well as a Marriage Contract or Cohabitation Agreement with your new partner. A Marriage Contract or Cohabitation Agreement will apply in the event of death, as well as separation. Of course, you should prepare a Will to govern the administration of your estate. It is important to ensure that any agreements you prepare work together with your will and estate plan.
- Speak to your lawyer about preparing Mutual Wills. Mutual Wills are any two (or more) wills which are mutually binding. This means that following the death of the first person, the manner in which the survivor can dispose of property or make changes to an estate plan are limited by the agreement made with the deceased. For example, in blended families, spouses who want to ensure their first family benefits from his or her estate may prepare Mutual Wills.
- Review your life insurance and pension plan benefits to determine how these will be distributed on your death and whether any changes to beneficiary designations can or should be made to meet your obligations.