Navigating Inheritance for Blended Families

8 July, 2025 4 minutes reading time

Key Considerations

Blended families are becoming increasingly common, presenting unique estate planning challenges, especially when children from previous relationships are involved. If you’ve remarried or entered a new partnership, careful planning is crucial to ensure that your assets pass fairly and smoothly to all your loved ones. According to the 2021 ONS census, 1.1 million UK children live in stepfamilies, highlighting the importance of expert legal advice and clear communication to respect your wishes and provide for everyone.

Common Challenges

Balancing the needs of family members and avoiding conflicts is a key challenge. Common issues include:

Unequal Inheritances: Fair distribution among biological children, stepchildren, and a new spouse can be a complex issue.

Ex-Spouse Claims: Former spouses may have financial claims; therefore, seeking legal advice is advisable. 

Conflicting Priorities: A surviving spouse’s ideas on asset use might conflict with the interests of children from previous relationships.

Intestacy Laws: Dying without a Will triggers intestacy rules, which often don’t suit blended families. While surviving spouses or civil partners have rights under the Inheritance (Provision for Family and Dependants) Act 1975, stepchildren typically don’t inherit unless they are adopted or financially dependent. 

Updating or Making Your Will

To protect your loved ones, update your Will regularly. Remarrying or entering a civil partnership automatically revokes your existing Will, potentially leaving assets to unintended beneficiaries. Without a valid Will, cohabiting partners have no automatic inheritance rights, regardless of their living arrangements or whether they have children. Review, update, or create a Will to clearly specify your beneficiaries. 

Tailoring Your Will

Although there’s no single solution for blended families, various strategies can help ensure fair asset division.

Simple Cash Division: If your estate exceeds the family home’s value, you might divide the remaining assets between your surviving spouse and children from a previous marriage. Alternatively, leave the house to your spouse and other assets to your children, allowing your spouse to keep the property.

Life Interest Trusts: This trust allows your spouse to reside in the family home and benefit from income generated by other trust assets after your death. They cannot sell or transfer the property, and children inherit the capital when your spouse passes away. The main concern is that children might have to wait many years for their inheritance.

Discretionary Trusts: This flexible approach allows trustees to decide when and how to distribute income or capital, adapting to changing circumstances. For example, they might withhold assets from a remarried spouse or fund a child’s education. Beneficiaries may not receive equal shares, but the aim is a fair distribution. It’s essential to select trustees carefully and include a letter of wishes.

Owning Your Home as Tenants in Common

Holding property as tenants in common (not joint tenancy) can benefit blended families. Unlike joint tenancy, which automatically passes the property to your spouse (‘sideways inheritance’), tenants in common allow you to specify your shares and designate beneficiaries, such as children from previous relationships. A lawyer can help you change your ownership arrangement. 

Tax Implications

Consider the tax effects of asset division. An English-domiciled surviving spouse is an exempt beneficiary for Inheritance Tax (IHT). However, children are not. If children receive more than the £325,000 tax-free allowance plus the £175,000 residence nil rate band, 40% IHT may be payable on the excess. While tax should not be the only consideration, its impact can be significant. Appointing impartial executors and trustees, possibly a professional solicitor, helps to manage the estate and trusts fairly, especially when conflicts may arise. 

Our Advice

Blended families require careful and thorough estate planning. By updating your Will, honestly discussing your plans with your family, and seeking expert advice, you can ensure your wishes are honoured and your loved ones are looked after. Please contact us if you need further information or advice about making a Will or estate planning in general. We are 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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