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Planning an Estate for Blended Families

Published: May 26, 2022

Today’s American families commonly have stepchildren, and they are treated as if they were full biological children, even in cases of inheritance. This is particularly true where stepchildren are part of a blended family from an early age. Biological siblings may have different feelings about a stepchild inheriting what they perceive is theirs as a natural heir. A surviving spouse may have the same feelings about their children’s inheritance.

Blended Families and Wills

Estate planning for blended families is key to a smooth inheritance process, especially since probate rules and intestate succession law do not treat step and biological children the same when it comes to inheriting. Open communication about your estate plan is also helpful in managing heirs’ expectations.

Trying to be equitable among your heirs can be tricky, and relying on your spouse and children to work things out after you are gone is not a good plan. To create a solid plan, carve out some quiet time and identify your most important estate planning goals, including distributions of all assets. 

These assets include your house, car, jewelry, other personal items, investments, retirement plans, brokerage accounts, and insurance. If you opt to gift items before your death, be certain you no longer include the asset or property in your estate plan. Even items of little financial value may be an expected inheritance from a child. The goal is to reduce tensions among family members. 

Communicating Your Wishes

Share your ideas with your spouse and agree on a basic approach, including scenarios for who might pass away first. Leaving property outright to a surviving spouse may not be the best approach as it does not ensure the children, step or otherwise, ultimately benefit. Many blended family systems use a trust to provide for a spouse while leaving their property to their children.

Contesting the Will

Stepchildren can contest a will to be treated as a full biological child if they are named in a prior will. A will that was written before a remarriage creates an opportunity to contest. Note that your stepchildren have very little chance of inheritance without a will. Dying without a will or intestate prevents your stepchildren from inheriting in all but a very few states. In states where they are eligible, stepchildren will be considered last in line to inherit because of the laws of intestate succession. 

A stepchild named in a previous will can challenge on the grounds of undue influence, lack of capacity, mistake, fraud, or coercion. If the will being contested is thrown out of probate, estate inheritance reverts to the next most recent will. A stepchild must be named in at least one prior will to have “standing” to challenge the will. If all wills are invalidated, the state will treat stepchildren as intestate heirs.

Even if a biological parent in concert with a stepparent makes their wills simultaneously and identically to leave the estate to one another, a surviving spouse can change their will upon the death of the other. It is possible for a surviving spouse to change their will, excluding the stepchildren. If the original will left equal shares to biological and stepchildren, a stepchild could contest to have the most recent will invalidated.

Understanding Current State Laws

The idea of reciprocal or mutual wills as a binding contract is not recognized in most states. Only if the will specifically constitute a binding contract not to change the will can a mutual will be enforced. The truth is, it is far more reliable to create a trust to care for a surviving spouse and your children’s inheritance than depend on mutual wills and goodwill after you are gone.

While contesting a will is permissible under certain circumstances, there is no guarantee it will be successful. To ensure your legacy wishes are met, consult with a qualified attorney who understands the intricacies and nuances of estate planning for blended families and can provide the best advice for everyone.

We hope you found this article helpful. If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

CLIENT Testimonial

This question is asked all the time: “Wouldn't it be easier to get a will off the internet, transfer my land when I die, and put my children on my bank account?” It’s just not a good idea. For the plan to work as you would want it to, it should account for plenty of complications. A good plan should protect your spouse and your children from the loss of valuable government benefits if anybody is or becomes disabled. The plan should avoid the delay and expense of probate court. The plan should protect money from children’s creditors or divorce or remarriage. It should be crafted to serve family harmony and to avoid disputes between children as joint owners. Even a relatively simple situation is made up of many moving parts. Internet documents and joint-ownership devices just won’t do the job.

Also, assembling the moving parts so they work smoothly is just the first step. Your estate plan needs maintenance too, just like your car has a “check engine” light. Major family events like serious illness or death, marriage, birth, or financial reversals are alerts that you should tune up your plan to reflect those changes. Your plan shouldn’t be “one and done.”

It takes expertise to coordinate the various strategies available. Don’t risk a result that will cause your family problems and unnecessary expense. Call us to create a plan that harmonizes the moving parts, so the gears will work together and you will leave the legacy you intended. We hope you found this article helpful. If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

- Creating an Estate Plan On Your Own: Think Twice

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CLIENT Testimonial

It can be quite confusing to determine which Medicare plan is best for you. There are several types of plans, and each has its own advantages and disadvantages. Understanding some basic features will help you decide how to maximize your healthcare dollars and choices. You should review your choice periodically, especially as elements of the Inflation Reduction Act of 2022 change prescription medication and vaccine policies. Coverage can also change from year to year..

There are three basic types of plans:

  1. Original Medicare
  2. Medicare Advantage
  3. Medigap

Original Medicare

Medicare is a government health insurance plan for people 65 and older. Original Medicare, sometimes called traditional Medicare, comes in several parts. Each part covers different things and has various associated costs. 

Most people do not pay for Part A as it was deducted from their taxes paid while working. It is primarily for hospital visits and nursing care. However, there are many fees associated with being in a hospital that Medicare does not cover, which you still might have to pay out of pocket.

Part B requires monthly premiums, which can be deducted from your social security. You can elect to enroll in part B through Original Medicare. It covers a portion of doctors' visits, durable medical goods, and more. 

Part D covers the cost of many prescription medications. You can add it to Original Medicare or purchase it as part of a Medicare Advantage plan.

Medicare Advantage

Medicare Advantage is offered through private insurance companies that Medicare approves. Most plans include Parts A, B, and D of Original Medicare with some variations from the original. There are a wide variety of Medicare Advantage plans, including Preferred Provider Organizations (PPO) or Health Maintenance Organizations (HMO). PPOs tend to have higher premiums and offer more choices than HMOs. Medicare Advantage HMOs and PPOs often have higher premiums than traditional Medicare because they usually cover more expenses, including prescription drug costs, vision, hearing, and dental.

However, the overall costs, premiums, plus out-of-pocket expenses for Advantage plans can be lower than Original Medicare because the private insurers manage patient care and limit choices. They assemble networks of hospitals and physicians to control their costs and reduce their customer's premiums. They also restrict access to certain providers and increase the cost of care obtained out-of-network.

Traditional Medicare allows people to seek care from any provider participating in Medicare, which includes virtually all hospitals and physicians.

Medigap

Medigap is a co-insurance or supplement to Original Medicare. You can enroll when you first enroll in Part B. It is also available through Medicaid, a union, or a former employer when you qualify for both programs. You can’t have both Medicare Advantage and Medigap plans. Medigap helps cover expenses that Original Medicare does not cover, such as co-pays and deductibles. Due to the enrollment restrictions, you should strongly consider Medigap when you first become eligible.

The Right Choice for You

With all the different plans, parts, choices, and restrictions, it is crucial to consider your priorities for care. Limited access to doctors and hospitals may become important if you need specialized medical care, such as cancer treatment. Before enrolling, consider what specialty hospitals are included in Advantage plans. Likewise, Advantage plans can make it difficult to see a specialist for ongoing and chronic conditions due to limitations in long-term care services. An estate planning lawyer or elder law attorney can help address long-term care planning and the potential to qualify for Medicaid when necessary.

The Kaiser Family Foundation has put together a cost analysis to help you determine when Medicare Advantage would save you money. As you can see, the longer you stay in the hospital, the less advantageous an Advantage plan becomes.

Consumer Reports notes that the JAMA reported that seniors on Advantage plans often get more preventive care than those on traditional Medicare plans. JAMA published a comprehensive paper about how Medicare plan choice affects spending and discovered that Medicare Advantage enrollees usually spend less.

Consumer Reports notes that the JAMA reported that seniors on Advantage plans often get more preventive care than those on traditional Medicare plans. JAMA published a comprehensive paper about how Medicare plan choice affects spending and discovered that Medicare Advantage enrollees usually spend less.

A Guide in Choices after 65

Enrolling in the right Medicare coverage is one of many decisions that will affect your quality of life in your senior years. We are here to help you navigate a wide variety of choices.

If you have questions or would like to discuss your legal matters, please do not hesitate to contact our office at 215-364-1111 to schedule a consultation.

- Medigap, Medicare Advantage, and Traditional Medicare

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