EP Wealth’s Stephanie Richman, CFP®, shares key estate planning strategies for blended families, from revisiting outdated documents to balancing legacy priorities.

Estate Planning for Blended Families

Blended families—where one or both spouses bring children from prior relationships—often face a unique set of challenges when it comes to estate planning. The goals may be similar to any other family: provide for loved ones, pass down wealth efficiently, and avoid unnecessary conflict. But the complexity increases when there are stepchildren, former spouses, separate property, and overlapping beneficiary expectations in the mix.

In these cases, a traditional estate plan may not account for the nuances of family dynamics or legal structures. Without clarity and regular updates, families could experience unintended outcomes that don’t reflect the original intent of the individuals involved.

Here are several important strategies that blended families may want to consider as they begin—or revisit—their estate plan:

• Update outdated estate documents and beneficiary designations, especially if they name a former spouse or reflect a prior family structure.
• Clarify what’s separate vs. jointly held property, particularly for assets brought into the marriage.
• Use trust structures like bypass or QTIP trusts to preserve legacy goals while supporting a surviving spouse.
• Balance the needs of biological and stepchildren, ideally in a way that’s clearly documented.
• Family conversations between parents and heirs to reduce confusion and mismatched expectations.
• Review beneficiary designations on retirement accounts, insurance policies, and other assets regularly.
• Work with a financial advisor to align your estate plan with both practical needs and family dynamics.

Common Pitfalls in Estate Planning for Blended Families

In my work as a CERTIFIED FINANCIAL PLANNER™ at EP Wealth, I’ve seen how even well-intentioned estate plans can fall short when they’re not revisited after major life changes. Blended families bring added layers of complexity—multiple households, stepchildren, and prior legal arrangements—that standard planning approaches don’t always account for. Here are some of the more common pitfalls we see:

Delayed Action

One of the most frequent challenges is inertia. Despite good intentions, individuals often delay updates after a major life event like divorce or remarriage. This can leave old estate plans intact long after they no longer reflect the person’s wishes.

Outdated Documentation

A common situation involves a divorced spouse who never updates their trust or retitles their accounts.

For example, imagine a woman who divorces and later remarries. If she passes away before restating her trust or updating her account registrations, the primary beneficiary could still be her ex-husband. Her assets might then be inherited by his new family—or even his stepchildren—rather than her own children.

This kind of outcome is more common than many people realize, especially when outdated documentation remains legally binding.

Unclear Ownership of Assets

When individuals enter a second marriage with substantial separate property, failing to clearly define ownership can cause confusion. Titling assets jointly or placing them into a shared trust without careful designation may alter how those assets are ultimately distributed.

Unbalanced Inheritance

Without a clear plan, stepchildren may be unintentionally excluded—or included in ways that lead to perceived unfairness. Unequal treatment is not necessarily wrong, but it should be intentional, clearly articulated, and legally documented.

How to Avoid These Pitfalls

Revisit and Restate Your Plan

Major life events like divorce, remarriage, or the birth of a child often call for a complete restatement of trust documents. Even small details—like how accounts are titled or which trust holds certain assets—can have significant consequences if not updated.

Clarify Intent with Your Heirs

While many parents prefer not to share full financial details with their children, there’s still value in communicating the broad structure and purpose of your estate plan. Advisors can support these conversations without breaching confidentiality, helping to create understanding around your wishes.

Document Your Wishes—Don’t Rely on Assumptions

In estate planning, a beneficiary may have a voice—but not a vote. Even if children or stepchildren believe they’re meant to inherit certain assets, the actual distribution follows what’s documented, not what’s assumed. Outdated trusts or beneficiary designations can unintentionally direct assets to an ex-spouse or skip over intended heirs.

Reviewing and updating documents regularly can help align legal outcomes with current wishes.

Maintain Separate Property Where Appropriate

Separate property trusts or carefully titled accounts can allow individuals to retain control over assets brought into the marriage, while still supporting joint planning with a new spouse.

Estate Planning Tools for Blended Families

Bypass Trusts

Bypass trusts allow the surviving spouse to access income or principal for specific needs while preserving the deceased spouse’s estate tax exemption. They also allow the original owner to name beneficiaries—often children from a previous marriage—to receive what remains upon the spouse’s death.

QTIP Trusts

Qualified Terminable Interest Property (QTIP) trusts also provide for a surviving spouse but allow the original grantor to designate where the assets go after that spouse passes. This is one way to support a current partner without compromising legacy goals.

Separate Property Trusts

These allow individuals to retain control over pre-marital or inherited assets, even within a joint estate plan. Beneficiaries can be distinct from those named in a shared trust.

Gifting Strategies

Lifetime gifts—through irrevocable trusts, UTMA accounts, or other vehicles—can provide financial support to children or stepchildren during one’s lifetime. In some cases, this may reduce the size of the estate and create flexibility in multigenerational planning.

Donor-Advised Funds

For families with a charitable focus, donor-advised funds can involve children in giving decisions. Successor grantors may carry forward a family’s philanthropic values long after the original donor’s lifetime.

Balancing the Needs of Biological and Stepchildren

Estate planning doesn’t always mean treating everyone the same, but it does require clarity and intention. Some families use separate trusts to direct specific assets to biological children while providing other forms of support to stepchildren. Others may involve adult children in trustee roles or facilitate family conversations to foster transparency.

The key is articulating your goals clearly—and documenting them thoroughly—so they aren’t subject to guesswork later.

Avoiding Unintended Inheritance or Disinheritance

In blended families, it’s especially important to review beneficiary designations on retirement accounts, life insurance policies, and any pay-on-death accounts. These designations typically override what’s written in a will or trust. Failing to review them after a divorce or new marriage could result in unintended inheritances—or disinheritance of loved ones the client intended to include.

Additionally, dying intestate—without any estate documents in place—can shift decision-making to the courts, where default state laws determine distribution. This can lead to outcomes far from what the individual would have chosen.

The Role of a Financial Advisor

Financial advisors can provide critical guidance to families navigating the complexities of estate planning in a blended household. At EP Wealth, we work with clients to:

• Review existing documents and identify gaps or inconsistencies
• Summarize current estate structures in plain terms
• Offer guidance on potential updates or revisions
• Coordinate with partner attorneys for document drafting
• Help facilitate family discussions when appropriate
• Support continuity for future generations

EP Wealth’s estate planning services are part of a broader effort to align financial strategies with family goals. Learn more about how we support estate planning for individuals and families. Contact an advisor to learn more.

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