Sometimes, there are few answers to the problems of blended family estate planning. Sometimes, the answers are not attractive, or easy.
It is often difficult to discuss, too, because of the many sensitivities that arise. Faced with the reality, many people give up without even trying.
This is unfortunate because failing to plan is a surefire way of planning to fail. For deceased estates, planning to fail can have disastrous consequences, usually for the people most important in a person’s life: their family.
There are a few principles that I have observed:
- Ignoring the problem won’t make it go away;
- Addressing the problems can be beneficial to the extended family relationships;
- Understanding an estate plan is essential to ensuring that it will work;
- Good plans can be ruined if they are not executed properly, or reviewed regularly; and
- Trust is not adequate.
Yes – trust is not adequate, not because you can’t trust your partner, but because bad things happen when people fail to put in place a plan that ensures that their estate planning actually works.
This means consideration of all assets and resources – not just houses and money in the bank, but other resources like superannuation, which may or may not form part of the estate. It also means consideration of possible threats to an estate plan, such as the suing of a deceased estate as a result of poor planning, or of the poor execution of a good plan.
In most circumstances it is possible to resolve blended family estate planning challenges, and to control and avoid the disaster of a disputed estate or, worse, a disastrous estate that cannot be disputed because there is simply no legal remedy to the disasters caused by poor planning.