Starting a blended family can be an exciting change for parents and their children. Yet, issues inevitably arise when family dynamics shift. For example, there are major estate planning and inheritance issues to address when establishing a blended family in Florida. Specifically, there are inheritance traps that people may overlook if they don’t specifically revise their estate plans to reflect their new family arrangement.
What do parents who have recently remarried need to need to know to protect themselves, their loved ones and their legacies?
A simple will may not be sufficient
Relying on just a will or failing to create an estate plan is perhaps the most common blended family inheritance trap. People who live with and support their stepchildren may assume that they have automatic legal protection.
However, stepchildren generally only have the right to inherit if an estate plan allocates assets to them as named beneficiaries or their stepparents legally adopt them. Intestate succession laws in Florida do not protect stepchildren in a blended family scenario.
Additionally, a simple will may not hold up under scrutiny in probate court in the event of a dispute. Florida does not enforce no contest clauses, which means that anyone with an interest in the estate could potentially challenge the will in court without risking their inheritance.
The impact of spousal inheritance rights
Spouses have a legal right to inherit from one another’s estates. Neither spouse can unilaterally disinherit the other by allocating all of their resources to other beneficiaries, even if those beneficiaries are their children from a prior relationship. Florida allows a surviving spouse to receive a minimum of 30% of the deceased individual’s estate, even if they are not included in a will.
Beneficiary designation issues are common
People with financial accounts and life insurance policies may file beneficiary designations with their insurance companies or financial institutions. Those internal documents dictate who actually receives life insurance proceeds or takes control of an account after the current owner’s death. Outdated beneficiary designations can complicate probate proceedings, as they generally take priority over any language in a will intended to allocate those resources to specific beneficiaries.
What documents should people update?
Numerous documents require revision when an estate plan is impacted by the creation of a blended family. The documents that people may need to review with a skilled legal team include:
- Wills
- Trusts
- Powers of attorney
- Living wills
- Healthcare surrogate designations
Updating all of these documents can help ensure that an estate plan extends appropriate protection to all members of a newly-established blended family.
Working with a Florida estate planning attorney is critical for those with complex familial and financial circumstances. Proper guidance can make it easier to avoid common Florida inheritance traps when family circumstances change.