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‘Blended’ Families – Who Takes Priority When It Comes to Inheritance?
23 May, 2018 3 minutes reading time
The Office for National Statistics reported 27.2 million households in the UK in 2017. While the most common type is a single family (with or without children), multi-family households are the fastest growing. Over a third of couples raising children today have a step-child living with them. It’s no surprise, then, that “blended” or step-families often face unique legal, financial, and practical challenges.
Disagreements and differing opinions are a natural part of family life. These issues can become even more pronounced when it comes to inheritance. Understanding the rules surrounding beneficiaries is crucial to ensure your assets go to your intended recipients.
Blended families often face greater complexity in estate planning. For example, how can you provide for your partner while ensuring your children from a previous relationship receive an inheritance?
Consider this situation: a man with two adult children from a previous marriage remarries. After ten years, he passes away, leaving everything to his wife. His children had assumed they would inherit his assets. Does the surviving wife have a moral or legal obligation to share the inheritance with her husband’s children?
Many people avoid addressing this issue, either by creating a simple will or neglecting to plan altogether. They rely on their surviving partner to “do the right thing.”
Blended Families: What Are Their Legal Rights?
- One spouse can leave everything to their partner through a will
- In turn, the surviving step-parent is not legally obliged to leave anything to their step-children
- 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
- One spouse may have most of the money
- There may be an age difference which may impact long-term care
- There may be tension from a prior relationship
- Who pays the taxes when the first spouse dies?
- 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 not easy, 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 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, it is well worth the effort.
If you’d like to talk to us about your 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.