Blended families have become relatively common. When parents with young children divorce, they may eventually find new romantic connections. If they marry someone who also has children from a prior relationship, what results is a blended family.
The parents each have their own children from previous relationships to care for. They might also add new children to the family. Blended families create unique challenges for estate planning and administration.
The use of a trust is a common tactic employed by those who want to have effective estate plans despite their complicated family circumstances. Blended families can also be the reason that litigation occurs during the trust administration process.
Parents in blended families have much to consider
Children from two different sets of parents and possibly also children born after establishing the blended family all have different needs and forms of support available to them. Parents have to make determinations about what they intend to provide for their pre-existing children, new children and stepchildren before they establish a trust.
Frequently, the children themselves may also have established inheritance expectations, which may not have any basis in reality. Those expectations may ultimately lead to estate controversies when one parent dies, possibly followed by trust litigation.
Frequently, children from blended families who are trust beneficiaries may take issue with what they perceive as favoritism, possibly because of unequal distributions of resources when comparing the inheritances of biological children with those of stepchildren. Particularly in scenarios where parents are not precise and specific when drafting trust documents, disappointment and misdirected grief might lead to beneficiaries initiating trust litigation.
Legal disputes about the contents of the trust or the actions of the trustee can significantly diminish what beneficiaries eventually receive from the trust. Trustees may need to use trust assets to cover the costs of resolving the dispute.
Parents can plan to prevent litigation
Trusts are popular among those starting blended families in part because they are harder to challenge than basic wills. Parents with blended families may need to be very precise and specific as they establish trust documents to diminish the risk of litigation in the future.
They may need to discuss their intentions with one another and with an attorney. They likely need to outline their intentions very clearly and thoroughly within trust documents. They may need to explain their intentions to their children and stepchildren. Additionally, they may need to review and modify trust documents when family circumstances change. The estrangement of an adult child or the addition of new children to the family can require adjustments to existing trust documents.
Creating a trust and regularly reviewing it to ensure it remains updated can help parents in blended families prevent probate conflicts from damaging the blended family unit. In scenarios where trust litigation is necessary to resolve a dispute, a trustee and the beneficiaries at issue may need support to navigate the matter, and that’s okay.