When families change, estate plans should change with them. Making sure your partner is provided for while protecting the inheritance of your children requires careful planning.
Modern families come in all shapes and sizes. Second marriages, blended families and long-term relationships are increasingly common, bringing with them new dynamics, responsibilities and, sometimes, complex financial considerations.
For those entering a second marriage or building a life with a new partner, making sure everyone you love is provided for can be more complicated than it first appears. While you may want to ensure your surviving partner is financially secure, you may also want to protect the inheritance of children from a previous relationship.
Without the right estate planning in place, your wishes may not be fulfilled in the way you intended. So, how can you protect your partner, provide for your children and ensure your estate is distributed according to your wishes?
When a New Marriage Changes Everything
One of the most important things to understand is that getting married can have a significant impact on an existing Will.
In England and Wales, marriage or entering into a civil partnership will usually automatically revoke a previously made Will, unless it was specifically prepared in contemplation of that marriage or civil partnership.
This means that someone who remarries without making a new Will could unintentionally leave their estate to be distributed under the rules of intestacy.
These rules determine who inherits when someone dies without a valid Will. They give certain rights to a surviving spouse or civil partner and, where applicable, children. However, the outcome may be very different from what the deceased person would have wanted, particularly where there are children from a previous relationship.
For those entering a second marriage, this makes reviewing and updating a Will particularly important. What may have been appropriate when raising a young family or during a first marriage may no longer reflect your wishes or the needs of your family today.
Balancing the Needs of Your Partner and Your Children
For many people in blended families, one of the biggest estate planning considerations is how to provide for a surviving spouse while ensuring that children from a previous relationship receive their intended inheritance.
Consider a situation where someone owns a property with their new spouse, has savings and investments, and has two adult children from a previous marriage.
They may naturally want their new spouse to be able to remain in the family home and maintain their standard of living should they die first. At the same time, they may want to ensure that their children ultimately inherit a share of their estate.
Without careful planning, these wishes can sometimes conflict.
For example, leaving everything outright to a surviving spouse gives them ownership and control of the inherited assets. Although they may fully intend to pass those assets on to their stepchildren or the deceased’s children later, their circumstances could change. They may remarry, have additional children, change their own Will or need to use the inherited assets during their lifetime.
This could mean that the children from the first relationship ultimately receive less than their parent intended, or potentially nothing from that part of the estate.
The challenge is therefore to find a way of providing financial security for a surviving partner while also preserving an inheritance for children.
How Can Trusts Help Protect Your Family’s Future?
A trust can be a useful estate planning tool for families in this situation, offering a way to provide for a surviving partner while retaining a degree of control over what happens to assets in the longer term.
Depending on the family’s circumstances and objectives, a Will can include provisions to establish a trust on death.
For example, a trust could be structured to allow a surviving spouse to continue living in a property for the rest of their life, or for a specified period, while ensuring that the property ultimately passes to the deceased’s children.
Alternatively, a trust may allow a surviving partner to benefit from income generated by certain assets, while the underlying capital is preserved for the intended beneficiaries.
The precise arrangements will depend on the type of trust used and the terms set out in the Will. Trustees are responsible for managing the trust in accordance with those terms, which can provide a framework for balancing the interests of different beneficiaries.
Trusts are not necessarily suitable for every family, and they can bring additional administration, responsibilities and costs. It is important to consider the type of trust, the assets involved, the intended beneficiaries and any potential tax implications before deciding whether this approach is appropriate.
However, for some blended families, a carefully structured trust can provide reassurance that a surviving partner is supported while the deceased’s wishes for their children are also taken into account.
Don’t Forget the Wider Family Picture
Estate planning for blended families involves more than simply deciding who inherits what. There are several other important considerations that are often overlooked.
- Your family home: How the property is legally owned can affect what happens to it when one owner dies. It is important to understand whether your share can be passed on under your Will.
- Your executors and trustees: Choosing people you trust to administer your estate and, where relevant, manage trusts is an important decision. They should be capable of acting impartially and managing potentially sensitive family relationships.
- Financial security: Consider whether your surviving partner will have sufficient resources to maintain their lifestyle, particularly if they depend on your income, pension arrangements or other assets.
- Children and future generations: Think about how and when your children should receive their inheritance, especially if they are still young or may benefit from financial support over time.
- Lasting Powers of Attorney: Estate planning also involves considering what would happen if you were unable to make decisions for yourself during your lifetime. A Lasting Power of Attorney allows you to appoint trusted individuals to make decisions on your behalf, within the authority granted.
Taking the time to consider these issues can help reduce uncertainty and provide greater clarity for the people who matter most to you.
Why Reviewing Your Will After Major Life Changes Matters
A Will should not necessarily be something you prepare once and then put away indefinitely. Significant life events can change your priorities, relationships and financial circumstances, making it important to review your arrangements periodically.
Remarriage, divorce, the arrival of new children or grandchildren, buying a property, receiving an inheritance or a significant change in your financial position may all be reasons to revisit your estate planning.
Even if your existing Will still reflects your wishes, reviewing it can help identify any gaps or provisions that may no longer be appropriate.
It is also worth remembering that a Will does not necessarily cover every asset. Certain jointly owned assets, for example, may pass automatically to the surviving joint owner, depending on how they are held. Reviewing the ownership of your assets alongside your Will can therefore be an important part of ensuring your estate is structured as intended.
Most importantly, your estate plan should reflect your current family circumstances and provide a clear framework for how you want your assets to be dealt with.
Protecting What Matters Most
For those with blended families, estate planning is about more than distributing wealth. It is about making considered decisions that recognise the people who are important in your life and the responsibilities you have towards them.
With the right planning, it may be possible to provide financial security for a surviving partner, protect the intended inheritance of children and reduce the potential for uncertainty or disputes in the future.
Every family is different, and there is no single approach that will suit everyone. Taking professional advice can help you understand the options available and put arrangements in place that reflect your individual circumstances and wishes.
At Protrust Consulting, we understand that family circumstances are rarely straightforward. We can help you explore your estate planning options, including the potential role of trusts, to help ensure that the people you care about are considered in your plans.
If you have any questions or would like advice tailored to your circumstances, please don’t hesitate to get in touch with our Estate Planning Team – We’re always happy to help.
Robert Cartmell
Founder & Senior Consultant
