Round Two: Blended Families and Estate Planning.

• Author: England, Mandy

One of the main goals that people have when they are estate planning is making sure their family members are taken care of when they are gone. This can be more complicated when you have a blended family, where there can be all kinds of additional considerations. How do you balance supporting a second spouse with leaving gifts to children of your first marriage? Do your stepchildren have any claim against your estate? How would a prenuptial agreement fit into the equation?

There is no "right" way to approach a blended family situation, as every family (and their relationship) is different. However, this article touches on some issues that commonly arise that you may want to consider as you plan for your own family.

Prenup or Cohabitation Agreement

When entering into a new long-term relationship, particularly after a divorce, many people will consider a prenuptial agreement. For couples entering into a common law relationship, in which their partner is called an adult interdependent partner or "AIP", the equivalent is called a cohabitation agreement. These agreements are designed to govern how assets will be divided on the breakdown of a relationship, but they can also address the treatment of assets after death. One important fact is that such an agreement may not be determinative after death.

There is a legal obligation to provide financial support for your spouse or AIP after your death. If your spouse or AIP does not believe that they were adequately provided for by what they received from your estate, then they can bring an application to request that a larger share of the estate be provided to them for support. The court has the power to make an order for additional support to your spouse, notwithstanding any prenuptial or cohabitation agreement that may have been in place.

There are methods, such as the use of a trust, which may protect assets from a support claim after your death. While it can be effective, it can also be complicated to do properly. You should seek professional advice, to discuss your particular situation including potential tax implications, in order to determine whether it might work for you.

Even so, a prenup or cohabitation agreement can be persuasive in determining what amount of support might be appropriate, and can be an effective way on death to ensure that certain assets are not used to fund any support payable to your spouse against your wishes. If you have one, you should always discuss such an agreement...