How Is Estate Planning Different For Blended Families In BC?
Family structures have significantly changed in British Columbia (BC) over time, especially marking an increase in blended families. People have started bringing in children from previous marriages into their existing relationships. This, along with remarriages and common-law partnerships, has given a boost to several blended families in BC.
While blended families bring unique joys and experiences in people’s lives, they also carry unique legal challenges. If you live in such a family and want to provide for your loved ones after your demise, you will need a blended family estate plan.
These estate plans are unique to blended families. While the core remains the same, you should be aware of certain changes made to suit blended families.
Seeking legal help will make many things easier for you and your family members. Look for the best family lawyers in Surrey, Vancouver, Richmond, or wherever you are located in British Columbia. Working with local lawyers will help give you an accurate estate plan for your blended family.
Why Is Estate Planning Important For Blended Families?
The Wills, Estates, and Succession Act (WESA) of BC governs how you can plan and manage your estate. If you pass away without a will and a proper estate plan, the court will distribute your wealth among your blended family as per the WESA regulations.
Estate planning gives you control over how you want to manage your wealth and what you wish to distribute among your loved ones. Blended families are often complicated, and the straightforward estate planning rules of WESA may not do justice to your wishes.
Important Estate Planning Considerations For Blended Families
Keep these considerations in mind regarding blended family estate planning in BC:
Protecting Spouse And Children
Most individuals face the challenge of balancing the needs of their existing partners and their children from previous families. If you pass on a major share of your wealth to your partner, your children are likely to get disheartened by your decision. The same problem would arise if your children got a major share of your wealth, leaving your partner disheartened.
While there is no single solution for this problem, people often create trusts to provide income and security to their spouses. At the same time, their biological children inherit their assets.
Stepchildren And Inheritance Rights
According to BC laws, there are conditions for your stepchildren to inherit your wealth through a blended family estate plan. They cannot naturally inherit your wealth unless:
- You have legally adopted them, or
- You have named them in your will
You should clearly mention your plans about passing on a portion of your wealth to your stepchildren in your will to make the inheritance valid.
Providing Ongoing Support
If you are obliged to provide child or spousal support from your previous relationship, your estate will have the same obligations after your demise. Even if this reduces the shares your current spouse and stepchildren receive, you will need to provide ongoing support even after your demise.
If you are concerned about your blended family not getting enough assets, you can work around it with your lawyer. In many cases, life insurance policies cover the ongoing obligations. This keeps your wealth intact and available to your current family.
Jointly Owned Property
If you own a property in joint tenancy, it will automatically pass on to the surviving tenant, irrespective of what you mention in your will. This can complicate matters if you are planning to pass on such a property to your children or stepchildren.
Important Estate Planning Tools For Blended Families
Most blended families rely on these estate planning tools to manage their wealth and its distribution:
Will
A carefully created will plays the most important role in your blended family estate plan. Here is how it provides clarity and precision to your estate plan:
- You can specify how exactly you want to divide your estate
- It helps you name the stepchildren who should inherit your wealth
- It gives you scope to equalize your estate between your current spouse, your stepchildren, and/or children from your previous marriage
- You can appoint an executor with a neutral outlook on specific matters
Trusts
Many blended families use trusts to navigate complicated estate management decisions. The most common options include spousal, family, and testamentary trusts.
With a spousal trust, you can provide income and/or use of assets (like a house) to your spouse after your demise. Once your spouse passes away, these assets pass on to your children.
A family trust lets you hold your assets for multiple beneficiaries (children, grandchildren, stepchildren, spouse, etc.). It often comes with tax planning advantages. Your estate planning lawyer will help you understand and receive these benefits.
You can also create a testamentary trust for your children. Such a trust delays the benefits your children receive and gives you more control over how they receive them. For example, you can plan for your children to receive their school or college fees when they turn 16, 18, and 21.
Marriage Or Cohabitation Agreements
The agreements you made for your relationship (marriage or cohabitation) often determine how your property will be divided upon death or separation. These documents play an important role in the estate planning process for your blended family.
Marriage or cohabitation agreements often limit the claims made against your wealth by a spouse or stepchildren. They make your estate plan clearer and more precise.
The Final Word
When you live in a blended family, it is common to experience legal complications, especially about estate planning. However, you can navigate them seamlessly with your lawyer by preparing documents like a will, trust, marriage/cohabitation agreement, and more.
In such cases, legal counsel plays an important role in the estate planning process. Your lawyer in British Columbia will prepare legal documents, review them, and offer an objective perspective on matters related to your blended family.