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The landscape of Indian family has changed from conservative family and joint family to nuclear family. And today, we are seeing a growing number of blended families.
Blended family comprises spouses who have children from earlier marriages. It includes a mix of biological and step-parents, step-children and half-siblings. It also includes adopted children, foster children and other non-traditional family arrangements.
From the estate planning perspective, this increases complexity and leads to increased conflict. Let us look at some of the conflicts of blended families:
What will happen to step children?
If both spouses have children from their earlier marriages and they also bring in their sizeable assets then complexities can arise. Generally, such families create a simple Will leaving everything to the surviving spouse. This can create legal challenges for step-children in blended families, as they may not be provided for after the death of their step-parent unless they are specifically mentioned in the Will.
Why a trust is not enough in blended family?
Often people think that the best solution in a complex situation is a trust. At times, children get upset if the surviving spouse starts using up the trust corpus extravagantly, where he/she is the primary beneficiary. The residual wealth gets diminished, causing bitterness among the children and they might go to court to prevent it. Thus, before planning a trust, your clients have to think of all the possible complexities that can arise and if a trust can manage all.
How to plan for expenses?
In ancient Rome, Cato the Elder once remarked, “Even though work stops, expenses run on.”
In a blended family, what will happen if one of the partners requires long-term medical care? How will the children and step-children react to diminishing estate and what can they do?
The best way to solve these problems with blended families is by anticipating them and finding a way to prevent or manage them. Here are three tips that will help you deal with such issues related to blended families.
Don’t copy-paste: The simple copy-paste Wills don’t work in blended families because each family is different and so are its needs. You need to assess their situation and look at their relationships. This will help you uncover what could happen.
Take expert help: Blended families are complex. It will be better if your clients consult an expert who can anticipate all possibilities and pitfalls. Consider it a good investment to ensure that your family bonds stay strong and your distribution business remains intact.
Try new ideas: Be ready to try new ideas because a blended family has unique needs. A simple Will or trust cannot always work through all the complications. Solutions can vary from a joint Will or a trust managed by an independent trustee or different trusts for sets of beneficiaries.
Ravi Dole is the Co-Founder of Plan My Estate. The views expressed in this article are those of the author and do not reflect the views of Cafemutual.
