Estate planning strategies for blended families

Summary

• Wills alone aren’t enough for blended families—revocable trusts offer more control over how assets are distributed and can help spouses stay in the family home that the children will eventually inherit.
• Communication is crucial: Transparent conversations between spouses and children about financial plans can prevent surprises and family conflicts down the road.
• Don’t forget the simple stuff—updating beneficiary designations on retirement accounts and insurance policies can save your family from costly probate headaches.

Estate planning can get complicated for remarried spouses

The Brady Bunch seemed to make blended families work on TV, but they never had to deal with inheritance drama. One minute Marcia and Greg are sharing the family bathroom—the next they’re battling over who inherits dad’s architectural firm, with everyone screaming “Marcia, Marcia, Marcia” in probate court.

When remarried spouses bring different amounts of wealth to the mix—not to mention their own homes and children—the conversation over estate plans and who gets what can get complicated and emotional. Before you write the script for your own family, here are some basics that might help minimize the discord.

Have a will? Great. That’s not enough.

For many families, a simple will suffices for distributing assets among beneficiaries, and it’s crucial for assigning legal guardians to any minor children in your care. Wills can also serve as a catch-all for assets that lie outside of a trust. (More on trusts below.)

Wills are essential, but they’re rarely sufficient, especially in blended families. A will is necessary to guide the distribution of any assets not in a trust or an account with a beneficiary. But they don’t regulate the distribution of jointly owned property, and they typically don’t avoid probate court, which means your heirs could have to wait a year or more for their inheritances. And because the probate process is public, a will can trigger creditors chasing down debts—not to mention potential fraudsters interested in who got the three-carat diamond. Perhaps most importantly, especially for blended families, wills don’t offer the same level of ongoing control that trusts do, such as the ability to let your spouse live in your home as long as they like while eventually passing ownership to your kids.

Why you should consider a trust. Or two.

Revocable trusts, sometimes known as living trusts, are especially useful in blended or otherwise complicated family situations because they allow you to map out multiple scenarios to ensure your wishes are carried out after your death, says Joe Di Vico, a TIAA executive wealth management advisor in New York. They’re relatively easy (often easier than a will) to update while you’re alive and can be amended if a family dissolves or changes—whether through divorce, divorce among beneficiaries, new births, or deaths.

There’s a common perception that trusts are primarily for avoiding estate tax. But that's not a problem for most people, at least under current tax law, because you’d need an estate of $14 million or more (in 2025) to touch the federal estate tax. One tax benefit for everyone is the step-up basis for assets: At the time of your death, assets are revalued at fair market price, which means if heirs sell immediately, they won’t likely face much in the way of a capital gains tax bill. And with trusts bypassing the probate process, heirs can take ownership and execute decisions much faster than if the assets were left to them via a will. Assets in revocable trusts typically get a step-up in basis. Assets in most irrevocable trusts do not.

Trusts begin as a document created with an estate attorney to build the framework for what assets should be brought into the trust and who will receive them (the beneficiaries). Once it’s created by you (the grantor) and your attorney, the designated assets are brought into the trust. Next, the grantor names a trustee—a trusted family member, friend, or professional trustee—to distribute the assets after their death and according to the obligations of the trust.

A trustee takes on greater importance in communicating financial and administrative information with all beneficiaries, often over extended periods. Corporate trustees are frequently better suited for complicated family situations than family members, Di Vico says, to ensure your intentions are driven by a dispassionate professional. (If you want to punish a member of your family, make them a trustee of your estate, so goes an industry adage.)

To learn more about trusts, click here.

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