By Tom Bridge, Associate in the specialist Private Client Team at Hay & Kilner.
As every single one of us knows, all families have their own individualities and complexities.
But in a blended family, where one or both partners bring children from previous relationships into the new family unit, there can often be additional complexities to navigate to ensure fair treatment for all family members.
According to the latest Census, there were 781,000 blended families in the UK in 2021, a figure which has risen appreciably from the 717,000 families classified in this way in the 2011 Census.
Everybody should, of course, have a Will in place.
But for blended families, it is crucial that this requirement is properly addressed to ensure the surviving partner and their biological and stepchildren receive fair treatment, as choosing not to put a Will in place can have serious unintended consequences, particularly for blended families.
With the complexities involved, many couples decide to avoid it by simply doing nothing and relying on the survivor to ‘do what is right.’
But sadly, we have seen many instances of surviving spouses not doing this and instead going back on their promises.
If an individual dies without a Will, the Intestacy Rules will apply. This can result in a loss of control in relation to how the estate can pass, and there is an order of priority as to who benefits.
Under the current Rules, where there is a surviving spouse and no children, the surviving spouse is entitled to the whole residuary estate.
Where there is a surviving spouse and children, the spouse is entitled to personal chattels and a statutory legacy, which is currently £322,000. The remaining estate is then divided equally between the spouse and children.
In addition, not having a Will also means you have no chosen executor appointed, you are unable to appoint guardians for your infant children and there is no opportunity to put trusts in place.
Many couples opt to put Mirror Wills in place, and while this is likely to be better than no Will at all, this sort of straightforward solution can lead to unsatisfactory long-term results for blended families.
A typical Mirror Will might leave all assets to the surviving spouse and then, on the second death, to the surviving children.
While this seems fair, it relies on the surviving spouse not altering their Will after the first death, and providing they have capacity to do so, they could do this at any time.
The survivor could re-marry, or might fall out with the deceased’s children, and choose to redirect assets to beneficiaries of their choosing.
For blended families, this may mean the children of the first partner to die may not benefit at all and their intended inheritance is diverted elsewhere.
The solution to avoiding such situations lies in utilising trusts, which are, despite other connotations, simply legal arrangements through which assets are held and managed by trustees for the benefit of its beneficiaries.
They are invaluable in blended family estate planning, as they offer peace of mind that chosen beneficiaries will receive their intended inheritance.
There are many different Trust options available, but whichever one you choose, an individual can utilise them to ensure their partner has the necessary security and support while also preserving and ringfencing their principal assets, such as the family home, for their children.
They are a key way for blended families to ensure that assets are distributed fairly and loved ones are provided for according to individual’s personal wishes.
While thinking about what happens after you’re gone can be difficult, making sure you have all the necessary arrangements in place well in advance to allow your wishes to be fulfilled will give you real peace of mind and certainty about your family’s future.
For further information and advice on estate planning for blended families, or on aspect of private client law, please contact Tom Bridge at tom.bridge@hay-kilner.co.uk or on 0191 232 8345.