Estate Planning Checklist For Blended Families


When someone dies without a will, they die “intestate,” and their estate will pass to their heirs according to the state’s intestacy laws. The process is fairly straightforward for couples in their first marriage with shared children, but it can be a nightmare for couples in a subsequent marriage with a blended family. Without proper planning, you can almost guarantee that there will be infighting over how your estate is handled when you die.

To ensure all of your loved ones are provided for and treated fairly, take the time to formulate a comprehensive estate plan. Following is a list of 10 steps to follow, specifically tailored to estate planning for blended families.

1. Start With an Open Conversation

It may sound like a cliché, but the process needs to begin with a candid conversation between you and your spouse. It may be uncomfortable, but it’s indisputably essential. Before you start to update accounts and blend your assets, try to address the following topics:

  • If you were married previously, what obligations are you bound to in the divorce agreement?
  • If you have children from a previous relationship, how would you like to provide for them? If the children are minors, who should be their guardian?
  • What are your financial goals? When would you like to retire, and what type of retirement income will you need to maintain your standard of living?
  • What assets are each spouse bringing to the marriage?

While all of those questions are important, the final one may be the most important for your estate plan. In the state of Arizona, any assets that were acquired before marriage are considered separate property, and will remain separate as long as you don’t comingle the assets with your spouse’s assets. Any assets acquired during marriage are considered community property, and will be shared 50/50 between spouses. When you die, your spouse will retain their 50% share of the community property. Your 50% share, along with your separate assets, will constitute your estate.

Choosing to maintain separate assets or blend them together is a weighty topic—once you make your decision, you’ll need to stick with it throughout the entire marriage. The moment you combine assets in an account, those assets become community property and cannot be separated.

2. Review Existing Plan Documents

During the course of your discussion, be sure to review any existing estate planning documents. Look for a copy of your will, codicils to the will, trust agreements, living wills, power of attorney contracts, divorce agreements, and any non-probate assets with contracted beneficiaries. Most of these can be amended, but some (notably trusts and divorce agreements) may be difficult to change. If there are any contractual obligations that cannot be altered, be sure to include these in your estate plan.

3. Consider a Prenuptial Agreement

To some people, a prenuptial agreement implies a lack of trust in their new spouse. In actuality, that couldn’t be farther from the truth. Rather than breeding distrust, a prenuptial agreement fosters candor, clarity, and accountability, especially in relationships where one party has significantly more assets.

4. Draw a Plan

Once you have a firm grasp on your goals, your priorities, and any contractual obligations, it’s time to make a new estate plan. Starting with a simple flowchart of how your assets should be joined and ultimately disbursed can be helpful. Pay special attention to how you will provide for your spouse when you die, which (if any) assets go directly to your children, and how your spouse’s final estate will be distributed when they die.

When you’re ready to formalize your plan, it’s always best to work with an estate planning attorney, especially one who has experience with estate planning for blended families. Look for an attorney who has been around long enough to see some of their clients’ plans through completion, as such an attorney has probably come across unforeseen pitfalls that he or she can help you avoid.

5. Update Your Non-Probate Assets

Now that you have a plan, the easiest place to begin is with your assets that are not subject to probate. These assets have built-in beneficiary designations that allow them to pass to your beneficiaries without direction of a will, and without the need for probate. This includes:

  • Bank and brokerage accounts with a payable-on-death (POD) or a transfer-on-death (TOD) beneficiary
  • Retirement accounts (401k, IRA, etc.)
  • Real estate held in joint tenancy or as tenants by the entirety
  • Life insurance policies
  • Trusts

Blended families will need to pay special attention to the beneficiary designations on these accounts. Sometimes people in a rush list their new spouse as the primary beneficiary and their children as contingent beneficiaries, but unless you and your spouse die simultaneously, this arrangement may disinherit your children.

Once your spouse receives the asset upon your death, they are under no obligation to pass the inheritance to your children when they die. If you have children who you’re concerned may be disinherited, it’s better to gift specific assets to them (e.g. your spouse is the sole beneficiary for your 401k, and your children are equal beneficiaries to your life insurance policy). Alternatively, you can list your spouse and your children as primary beneficiaries, and designate what percentage of the inheritance they will receive (e.g. your spouse gets 50% of your estate, and your children split the other 50%).

As a side-note, if your former spouse is listed as beneficiary to your assets, don’t forget to replace them. If your assets accidentally go to your former spouse, there’s no guarantee the former spouse will “do the right thing” and give the assets to your new spouse or new children. Even if your will directs otherwise, the beneficiary designations on non-probate assets always trump directions in your will.

6. Address Assets Subject to Probate

Any assets subject to probate (chiefly individual bank and brokerage accounts, and property held individually or as tenants in common) will need to be addressed in your will. If not, they will be distributed according to the state’s intestacy laws, which may unintentionally disinherit your new spouse and children. A common approach is to adopt mirroring wills between you and your spouse, so that when you die your assets pass to your spouse. When your surviving spouse dies, the combined joint estate passes to your children.

Alternatively, you can establish a living trust to bypass probate. As long as you name yourself as the trustee and the primary beneficiary, you’ll be able to control the assets transferred to the trust during your lifetime. When you die, a successor trustee will step in to manage the assets, and your contingent beneficiaries (your new spouse, children, etc.) will receive the assets when the trust is dissolved.

7. Establish a Trust to Protect Your Children’s InheritancE

A common concern for blended families is the possibility for a surviving spouse to disinherit their deceased spouse’s children. Unfortunately, mirroring wills make this scenario more than possible. Even if your will lists your children as contingent beneficiaries, your surviving spouse is under no obligation to honor that when you die. After the assets are probated to them, they would be free to alter their will, effectively disinheriting your children, and leave the combined estate to their children from their former relationship.

In addition to using a trust to bypass probate, you can also use a trust to protect your children’s inheritance. Unlike a will that can easily be amended, trust agreements become irrevocable when you die, and cannot be changed.

In your trust, direct that the assets provide income to your surviving spouse during their lifetime, and upon their death, the assets are to be distributed to your children. As long as you don’t authorize access to the principal balance, income from the trust will be administered by the trustee, thus protecting the inheritance you’d like to leave for your children.

For long-term peace of mind, contact us to set up a consultation today. We look forward to helping with your will and other estate planning needs.

Call Arizona Estate Attorney Dave Weed at (480)467-4325 to discuss your case today.

Contact The JacksonWhite Estate Team

Call (480) 467-4325 or fill out the form below to schedule a consultation and discuss your best legal options.

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