‘Blended’ Families – Who Takes Priority When It Comes to Inheritance?

According to The Office for National Statistics, in 2017 there were 27.2 million households in the UK. By far the most common type of household is one family (with and without children). However, multi-family households are, perhaps unsurprisingly, the fastest growing. Over a third of all couples bringing up children today, have a step-child living with them. So, it stands to reason that legal, financial and practical problems are commonplace among so-called blended, or step-families.

Every family has arguments or differences of opinion. Inevitably, when it comes to dividing up your estate, family issues seem to matter more.  So, it’s very important to understand the rules on beneficiaries. You want your money to end up where you want it and not with someone you would prefer it didn’t.

As far as ‘blended’ families are concerned, the situation is likely to be more complex. How should you provide for your partner after they die, while still making sure your children get an inheritance?

Take a case, where a friend’s brother had married later in life. He had 2 children from his first marriage, much like his new wife, who had two of her own. Unfortunately, after ten years together and a short illness, the man died. In the event of his death, he had arranged to leave everything to his wife.

At the time of his death, the children from his first marriage were adults. He’d always been close to them and, before he married for the second time, they had understood his assets would ultimately pass to them. A reasonable assumption.

Does the surviving wife have a moral and/or legal obligation to share this inheritance with her husband’s grown-up children?

Many avoid the issue by adopting a simple plan or they do nothing at all. They will rely on their surviving partner to do what they think is right.

Blended Families: What Are Their Legal Rights?

1. One spouse can leave everything to their partner through a will
2. In turn, the surviving step-parent is not legally obliged to leave anything to their step-children
3. Dying without a will, the intestacy rules will apply. NB: The provisions do not allow step-children to benefit; although step-children may be able to bring a claim under the Inheritance (Provision for Family and Dependants) Act 1975.

Common Estate Planning Issues

1. One spouse may have most of the money
2. There may be an age difference which may impact long-term care
3. There may be tension from a prior relationship
4. Who pays the taxes when the first spouse dies?
5. Are there any support obligations for dependents or the previous spouse?

Many of these issues can be dealt with by drawing up a legal document, but in so doing, each party will need to be clear about exactly what they want.

Our Advice?

It might be difficult but discuss your wishes openly and honestly with the whole family.  Consider:

• What should happen to your treasured possessions which pre-date your current relationship?
• If you lose capacity, who should be granted power of attorney? Are you sure that you want your children from your first marriage to have no rights over your treatment or care?
• You may think your second wife is entitled to inherit your estate, but your own children and grandchildren may suffer.

If you have substantial assets you would like to protect, or you want to make sure you are even-handed or fair in distributing your wealth, it’s worth considering setting up a trust, so that:

• While your spouse is alive, he/she can live in your house rent-free
• When your spouse dies, the property can be sold and proceeds divided amongst your children/stepchildren
• Assets and trusts could support your other half, but specific conditions could be applied to restrict the use of capital

Put simply, you need to talk to your family and you need to plan. Choose your executor very carefully too. It might seem a tough call now, but in our experience, well worth the effort.

If you’d like to talk to us about your personal situation, please call us. We’re here to help.

Please note that all views, comments or opinions expressed are for information only and do not constitute and should not be interpreted as being comprehensive or as giving legal advice. No one should seek to rely or act upon, or refrain from acting upon, the views, comments or opinions expressed herein without first obtaining specialist, professional or independent advice. While every effort has been made to ensure accuracy, Curtis Parkinson cannot be held liable for any errors, omissions or inaccuracies.

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