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Estate Planning for Those in Second Marriages

Dec 27, 2017 9:00:00 PM The MacMillan Estate Planning Team Estate Planning, family disputes, inheritance, family estate planning, estate plan, family, second marriages


Before divorce was so common, wills were pretty straightforward. Your assets passed to your spouse, and if your spouse had already died, they passed to your children. With one sentence, your estate plan was basically finished. But in blended families, that simplicity is a necessary sacrifices for protecting the two disconnected beneficiaries in your life: your new spouse and any children from your previous relationship.

We often meet with idealistic Canadians who, seeing the best in both their new spouse and in their children, wish to uphold the traditional will. Assets passed to the spouse and then equally among the children. Often, along with their new spouse, these Canadians craft mirror wills. This usually looks a little like this:

Abbatha has two children from a previous marriage: Caitlin and Dale. Her new husband Basil has two child from his previous marriage: Edmund and Fawn. Abbatha and Basil both write an identical, mirror wills. The wills state that upon the death of one of them, all the assets will go to the surviving spouse. If both spouse have died, then the assets will be distributed equally among the four children. Both spouses are very happy with this arrangement, but when Abbatha dies, Caitlin and Dale spend less and less time with their stepfather. Their relationship fades, and as Basil gets older he decides to rewrite his will so that all of his assets (include the assets he inherited from Abbatha) go to just Edmund and Fawn. His stepchildren are cut out of the will and will no longer inherit any of their mother’s estate.

This story isn’t unusual. We’ve heard countless, heartbreaking stories from children who were disinherited by a surviving stepparent. Often times, they’re furious at their stepparent and blame them for not living up to the intentions set out by their biological parent. But the unfortunate truth is, if the biological parent doesn’t clearly state the intention that their assets should eventually pass onto their children, the stepparent isn’t doing anything illegal.

Trust Your Loved Ones But Verifying your wishes with your family may be the best guiding principle when crafting your personalized estate plan for your blended family. And by verify, we mean use trusts. Trusts are a powerful tool that allow you to keep some control over your assets even after you’ve passed. By creating a spousal trust, instead of your spouse becoming the legal owner of your assets, the assets are owned and managed by a trustee on behalf of your spouse. This ensures your spouse has a comfortable life with the assets they need, but it also means your spouse can’t control what happens to those assets when they no longer need them. As a part of the trust building process, it’ll be up to you to decide whether your assets pass on to your children, a charity, or something else entirely once your new spouse has died as well.

When you build an estate plan for your blended family, there’s a lot to consider. The expert estate advisors at MacMillan help to ask the tough questions. What if your new spouse and your children are no longer held together by the glue of your presence and your spouse disinherits your kids? What if your previous spouse tries to seize your assets? As we craft your estate plan together, we act as your sounding board and trusted confident.

With the help of your advisor, you can create a secure plan that protects your legacy from all potential threats. Contact the professional estate planners at MacMillan today to get started with your free consultation.

At MacMillan Estate Planning, our team of professional trust and estate practitioners, chartered accountants, financial planners, and legal professionals look forward to assisting you with the design of your estate plan and will ensure you build, protect, and enjoy your wealth. The information provided is general and may not be suited to your objectives or sufficient to ensure the protection of you and your family. You should not act on this information without providing MacMillan Estate Planning with the opportunity to ensure that it is suitable for your unique situation.

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