Blended families require extra estate planning care

Fairy tales of evil stepmothers are popular because there is often some level of truth to these stories. Strife between stepparents and children is not uncommon and this tension is likely to increase after the unifying member, the spouse, passes away. This can lead to disagreements over the handling of the estate. These disagreements may make administration of the estate, including trust administration, more difficult.

To understand what could go wrong, first go back to the basics

To better understand how to avoid or at least reduce the issues that could develop during this strife, it helps to know the basics of trust law. A trust is a legal tool that helps guide the distribution of assets. It is more complex than a will and, if done correctly, will keep the assets from probate. This can mean a timelier and potentially less expensive transfer of assets to loved ones.

Those who put together a trust can save their loved ones the emotional and financial strife that can come with the transition of an estate. Issues can arise if you are not clear of your intentions. It is very likely that both your current spouse and your children from another a marriage may mean well. They may believe the other did not truly understand how you planned to handle the administration of the estate. This lack of communication can result in a battle over the administration of the trust. Transparency can help to better ensure a smooth transition.

A real-life dispute provides an example

Take Tom Petty’s estate for example. In this case, Mr. Petty left behind a wife and children from another marriage. He had taken steps to help better ensure a smooth transfer of his assets, including the use of a trust. Allegedly the trust stated the wife was to lead administration, or handling, of the trust along with input from his two adult daughters. Tension and disagreements quickly rose as the three disagreed about how to handle the estate. Arguments between his wife and adult children over when to release some of his musical work and the proper business technique to manage his art have led to multiple court filings.

Needless to say, these disagreements have postponed the distribution of the estate and will result in additional expenses.

Trust administration is just one element to consider

It is also important to note that the trust document is just one consideration to help reduce strife for our loved ones during the transition of an estate. It is also wise to review beneficiary designations on accounts like savings accounts as well as update any guardianship and conservatorship documents.