Estate Planning Tips for Blended Families in New York

Blended families are a joy, but they do also bring some unique inheritance challenges. Proper and careful estate planning for blended families helps protect everyone involved from New York law that might otherwise divide your assets in ways you don’t expect or want.

Estate Planning for Blended Families in New York

New York intestacy rules lay out the default plan if you die without documents in place. If that happens, the basic plan is as follows: 

• Your surviving spouse gets the first $50,000, plus half the remaining estate (when there are surviving children or grandchildren)
• Surviving children and grandchildren split the other half
• Stepchildren do not inherit unless they have been formally adopted

There are more to these default rules, of course, depending on the exact makeup of your family situation. In addition, even if you have a will, if you have a surviving spouse, he or she has the right to elect against your will. It’s important to talk with a lawyer early on so you can design an estate plan that accounts for this instead of hoping for the best.

Estate Planning Strategies 

Revocable Living Trust

This is a popular choice for blended families because it lets you keep control of the assets in it during your lifetime while spelling out what happens to them afterward exactly. You can, for example, direct that your spouse may live in the family home for as long as they wish or receive income from certain investments. Once they are gone, the remaining principal could pass to your chosen beneficiaries, including stepchildren if that’s your desire. 

Beneficiary Forms

Beneficiary forms can be attached to retirement accounts, life insurance, and many financial accounts, and they allow those assets to be passed straight to the people named on the form as soon as you pass. They do not follow instructions in your will or trust, and you’re not limited to designating just legal family members. 

Minor Children

If minor children live in your household, your will should name a guardian who will raise them if neither parent can. In blended situations, the right guardian may come from your side of the family, from your current spouse’s side, from a former spouse’s side, or something else entirely, depending on the relationships and practical realities. Naming an alternate also gives you backup protection in case the first guardian is unable or unwilling to serve.

Joint Ownership & Payable-on-Death Accounts

Putting a house in joint names with a new spouse may limit what can later pass to your children from your first marriage Or, it might create liquidity issues if the surviving spouse needs to sell it before he or she can pay estate taxes or other bills related to probate or in order to divide the estate correctly. 

You can also name just one child as a beneficiary on an account, but bear in mind this can create imbalance or resentment among siblings and step-siblings. Talk with your lawyer about how to do this carefully. 

Talk to us today at DeCandido & Azachi in Forest Hills, NY to schedule a free consultation on your estate. We serve clients throughout Nassau County and Queens, as well as families in Texas from our Plano office.

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