Wills and blended families, how to please everyone… almost!
‘Blended’ families is a broad term for families where there are children from previous relationships – i.e., stepchildren. A big consideration for couples with these families is how to ensure their respective children are not left out and that all parties are treated fairly.
If a couple chose not to make a will – then intestacy rules will apply. If they’re married, then it’s likely that the bulk of their assets will pass to their spouse when they die. Then, when the second one passes, these assets will only go to their children – NOT their stepchildren.
If they are not married and one of them dies, these assets will pass to their children. In some cases, that may include the home, which could mean the surviving partner is forced to sell up. If the person has previously been married, they must be divorced to ensure the assets go to the children.
Many couples opt for simple mirror will, which isn’t an issue in itself, but can result in problems if there is a fallout later on.
A simple will may say, ‘I give all my assets to my husband, but if he dies before me, then to our respective children in equal shares’, and the husband’s will could say the same. The intention of this is that when the first party dies, their estate passes to their spouse. Then when the spouse dies, it all goes (fairly) between the children.
However, this relies on the surviving partner not changing their will after being widowed. Of course, they could remarry or fall out with your children. This means there is no guarantee that your children’s intended inheritance won’t be diverted away from them. Similarly, if that surviving partner finds themself needing care, all of the assets that have become theirs would be used to pay for that care – slowly dwindling the level of inheritance available for your children.
One solution to this dilemma is to include a ‘Life Interest Trust’ in your will. This type of trust allows your spouse or partner to enjoy the benefit of your assets while they’re alive. This would see them receive an income from any investments or live in any property included in the trust but ultimately, they would not own those assets.
With property often being a person’s biggest asset, a trust ensures your partner has the security of a home while they’re alive, but also leaves your property ring-fenced for your children.
Life Interest Trusts are beneficial for surviving partners, as well as any children in the family, or whoever else you want to ensure is looked after once you’ve passed.
When planning for later life, it’s always best to speak with a professional, such as an SFE solicitor, who will have built specialist experience in this area of law.
You can find a local SFE solicitor here: https://sfe.legal/find-a-lawyer/