Blended families are becoming more common. A Blended family is one where a couple has a child or children together but have children from previous relationships. These types of families can raise concerns as to how each family member will benefit when a parent passes away. It is therefore important to consider estate planning carefully.
Many people would come at this scenario, to provide everything to the spouse/partner in their Will and then trust that their spouse/partner in their will shall pass everything to all the children on their death. However, this is reliant on trust and also that nothing happens to the spouse/partner, meaning that they either do not make a Wil, change the Will or lose the house value in care fees due to mental incapacity.
What is the alternative?
You may want to consider setting up a Trust within your Will, so to protect your blended family and ensure that they receive an inheritance from you.
A Trust is an arrangement where persons (Trustees) hold assets for the benefit of another person (beneficiary) and a Will Trust would only begin on the death of the person who made the Will.
The most common type of Trust for a blended family would be a Life Interest Will Trust. This type of Trust allows the person to state that their spouse/partner can use an asset during their lifetime and then the property will pass to children on the death of the spouse/partner or them entering permanent care or you can state that the trust ends on remarriage.
For most people, their home is their main valuable asset. For example, you own a property jointly as joint tenants. We can sever the joint tenancy in the property, so you can hold it as Tenants in Common in equal shares. You then make Wills incorporating a Life Interest Trust (Property Trust) in the home, so that the survivor can live in the house for the rest of their life, or until remarriage or entering full time care. However, on the death of the spouse/partner, remarriage or entering permanent care, 50% of the property value has been safeguarded and will pass to your children from your previous and your current relationship in equal shares or in whatever shares are decided.
By doing this, you are ensuring that your family are well catered for. You protect your spouse/partner by ensuring they have a roof over their head, and you ensure that your children all get a share and that if your spouse/partner remarries or changes their Will, your share of your house is not affected and will pass to your family as you want and not to their new spouse.
If you would like further advice or you would like to make an appointment give us a call today.