Attorney James Jones: [00:00:00] Remarried with step kids in Washington. Love may weave your blended family together, but without a rock-solid estate plan, your assets could ignite disputes that fracture these bonds. From community property pitfalls to trusts that ensure fairness. Stick with us today to uncover expert strategies that protect your loved ones and secure your legacy for generations, no matter how complex your family tree.
You are listening to the legacy talk podcast hosted by James A. Jones, attorney at law and founder of Sound Legacy Law, PLLC in Tacoma. Attorney Jones is here to talk about how to best protect your family assets and, well, pulling stories from his more than 20 years of helping families and business owners protect their assets, create their estate plans, preserve their wealth, and plan for the future.
Nobody wants to think about estate planning, but life has a way of sneaking up on you. And at any moment, something unexpected could happen that will leave you regretting 00:01:00 not having acted sooner. So join attorney James A. Jones in the Legacy Talk podcast and together learn how to plan for your future today and have peace of mind tomorrow.
Attorney James Jones: Welcome to Legacy Talk. I am your host, James Jones. On today’s show, again, we’re talking about blended families and estate planning, what you need to know. And for the story this week, I wanted to start like this. I’ve been doing this about 23 years, 24 years, and I couldn’t count the amount of times I’ve met with people that have issues that were caused by inadequately addressing their blended family, like Katie, for example.
Now, Katie and Dan were married for over 20 years. When Dan died unexpectedly, they lived in Dan’s house that he inherited from his parents when they had got married. Dan and Katie never had any kids together, but each of them had kids from prior relationships. Dan didn’t have a relationship with his son, [00:02:00] however, while he and Katie were married, he’d get a call or a card once in a while, maybe on his birthday, but never really had any other interaction with him, and neither did Katie.
Dan, unfortunately, died unexpectedly without a will, and since his house was inherited from his parents. It could be construed as his separate property in Washington. If a married person dies without a will, like Dan, their separate property doesn’t necessarily all go to their spouse. It’s split equally between their spouse and their previous kids.
Their separate kids. So Katie was left with a burden of trying to keep her house. That she had lived in for over 20 years with her husband, Dan, and satisfied Dan’s son, who was essentially a stranger to her. Or we could think about Steve, who left a will giving his estate to his five kids. No issues there, right?
Probably not. Problem was his wife and their four kids had no idea that there was a fifth [00:03:00] kid. In fact, the kid really didn’t even know that he was Steve’s kid. This caused some major feelings, as you could imagine. Turns out Steve had his fifth kid previous to his marriage, and his other four kids, and this was from a prior relationship that he conveniently never told anyone about.
Not that the kind of surprise that someone wants to have or hear about when someone dies. Right? Okay. Now, both of these situations could have been avoided with proper planning. And so today we’re talking about how we can overcome potential obstacles and issues and challenges with regards to blended families.
So, okay, I’m gonna talk about some points here. Number one, blended families complicate planning, right? There’s step kids, there’s ex-spouses, there’s new spouses. This is a complex family structure and based on today’s society where that is very common, it is not unusual.
Blended families often involve 00:04:00 stepchildren, ex-spouses, new spouses, which creates competing financial and emotional interests. Washington is a community property state, which means assets that are acquired during marriage are generally considered joint assets between a wife or husband or spouses, right.
Which can complicate this asset division with blended families. Sometimes, if it’s a divorce situation, there’s legal obligations from prior marriages like alimony or child support that may continue on and may conflict with new family priorities, which require some careful planning. So how do we do it? If we don’t do it right, there’s gonna be problems.
Okay, that’s the underlying point in this podcast today. If we don’t do it right, there’s gonna be problems as we learn with Katie without a will, that could be a major problem, right? Without a will. Washington’s intestacy laws, that means when you die without a will, those state says how things go.
Washington law prioritizes the surviving spouse and biological children, which 00:05:00 definitely excludes ex-stepchildren. So if they’re stepchildren and there’s no will, the stepchildren are getting nothing. Okay? They’re getting nothing. They must be named specifically in the will to get anything. Okay? So they’re not gonna get everything.
They’re not gonna get anything by law with the will. They’re going to get. Whatever you give them, if anything. Okay. They must be explicitly named in the will to inherit because they’re not legal heirs under washing law. Did we get that? Unless they’re legally adopted. Okay. That’s one caveat. If it’s a stepkid, that’s not your biological child.
If it’s an adopted child, that child is your child legally. Okay? Another issue is if you are married. And you do not list your spouse in the will; that could be a problem. For example, if a will predates a new marriage and doesn’t include the new spouse, Washington Law may ground them a share of your estate. Similar to the intestacy, share the dying without a will share, [00:06:00] which could reduce assets for the biological kids. So don’t forget to put your spouse in there. Don’t forget.
So planning is very important. I’ve done an episode similar to this on a similar topic where. I think it was about divorce and estate planning, which is how we’re getting here, I guess, where it talks about the pitfalls that are related to that. And so the same pitfalls lie under the estate planning side because if you don’t name the spouse or if you do an old will and then you do a new will and you don’t name the new spouse, you’ve got major problems.
Okay. So, how do we fix it? Okay. How do we fix this estate planning? How do we make sure we take, we have assets, fairly distributed control, timing of distribution, stuff like that?
One way is to use a revocable living trust. Now, if you’ve listened to this podcast before, you’re my client or a friend that just talks to me about estate planning. I’m a big trust guy. I like the revocable trust. I favor it over a will. These trusts avoid probate, which is. A big thing in Washington because it’s more streamlined, it’s 00:07:00 much more interesting, interesting.
Simple to do. And within this trust, we don’t have to go through probate. Okay. Which, if you wanna learn about probate, go to a different episode, but probate’s basically the legal process to distribute an estate. Okay. And so. With a trust, you can have precise asset allocation to a spouse or biological kids, or step kids.
It can be all laid out in there. It’s much simpler and there’s little or less room, I guess I should say, little room or less room for interpretation. You could also, within this revocable trust or through a will, create a Q-tip trust. Which can benefit a surviving spouse during their lifetime, but make sure that the assets in the trust go to the biological kids after their death.
So balances interests between the surviving spouse or a new spouse. That’s not the biological kid’s parent and the biological kids. You can also do things called bypass trust or trust, where you’re giving money to the [00:08:00] surviving spouse, which allows them more than income. That will protect assets for the biological kids and at the same time, reduce their potential estate taxes on the estate.
So one thing that’s very important here, and it gets into our next point, is just talk about it, right? Be transparent. I just did an episode, probably three or four or five episodes ago, talking to your family about estate planning. There you go. To have transparent discussions. Open communication with your family members about estate planning helps.
It helps manage expectations. It helps manage and prevent disputes, and it makes it just so much easier, like Steve and his fifth kid that nobody knew about. If it’s really bad, if it’s really bad, maybe a neutral mediator can help you facilitate discussions. That could be a friend, that could be a relative, that could be your neighbor, a religious leader, a non-religious leader, whatever you want, right?
If there’s issues between a new spouse and biological kids from previous marriages. In reality, though, documentation is the most important thing, right? We wanna [00:09:00] make sure that we’re clear about like, Hey, this is what we’re thinking, but we don’t wanna make it so that it’s just all verbal, ’cause verbal things with regard to your state, don’t.
Hold weight. Right? They’re not admissible. So if it’s not in writing, it’s not in writing, and it’s not relevant. And it’s not valid, and it’s not something that can be relied upon. Okay? So you gotta write it down, okay? Avoid this. Okay? We hear it all the time. I hear it all the time. My spouse will handle it.
I’m not worried about it. I’m just giving everything to her or him. They’ll deal with it. They’ll be fair. That’ll be fair. The problem with saying, I’m gonna give everything to my spouse, they’ll handle it. I’m not worried about dealing with my own other biological kids or previous kids, but relying on a surviving spouse to distribute assets fairly can always, always, and almost always does backfire as they.
Often, in most cases in my experience, favor their biological kids over the step kids. And you know why? ’cause oftentimes the step kids are jerks to ’em, or the biological kids are jerks to ’em, [00:10:00] right? it’s family harmony is sometimes hard to come by in those situations. It is often better to have a neutral executor or trustee in charge.
So, having that person appointed ensures that the assets are distributed according to your wishes. Not the spouse’s preferences, but like I said before, having binding documents like trusts or specific bequests in a will prevent these unintended consequences, unintended favor, favoritism. And so you wanna make sure that that’s dialed in right, have it laid out, and don’t just leave everything to your spouse and hope for the best.
Don’t do that. It’s so much easier to do it, and it’s really easy in a trust setting to have dual dispositive schemes. That means when I die, my stuff goes here. When you die, your stuff goes there. That’s so easy to do, and it’s not a billion dollars to do it. Okay?
Another option is to have a prenuptial agreement. We typically have a prenuptial agreement, which can clarify what’s your separate property is, what’s your community property is, ensuring that things that are 00:11:00 separate go to biological kids, community usually goes to the spouse, and complements your willow trust. Okay? They can also address the surviving spouse’s right to community property and the assets that they sort of had coming into marriage, which makes it a lot easier.
And with all of this stuff, you wanna talk to a lawyer, like talk to an experienced estate planning attorney like me who’s been through it, right? We’ve been through this battle, and we’ve been through these scenarios and know how to handle it ideally.
So here’s an example that happens all the time.
Like Tom’s new wife, Tom’s divorced, right? Tom remarried and left his estate to his new wife. Assuming she’d provide for his biological kids. The key mistake is that Tom failed to provide for his kids. He just said, Hey, everything goes to my wife. If she’s not around, then it might go to the kids, right? Or then it goes to her kids and my kids.
Which kids does it go to? He failed to have a dialed-in [00:12:00] precise estate plan, rather just made a blanket distribution to his wife, leaving his estate subject to. Her whim essentially. Right? Which typically goes in favor of her kids, right? So the solution to that would be to have a trust or specific requests that say, my kids get this, you get that.
I’ve got a client this week that I’m meeting with that I’ve is the same situation, right? That’s very similar. Second marriage, there’s a joint kid and there’s a separate kid, and I’m like, what do you want to do? You know, what do you want to do regarding what your wife gets versus what your separate kid gets, right?
And what about the joint kid? And so those kinds of discussions are important. I’m having a separate meeting with him to sort of go through all of the scenarios there, just so that doesn’t become an issue. Okay?
Now there’s another issue with kids. And guardians in Washington, if a parent dies, courts prioritize biological 00:13:00 relatives over stepparents for guardianship purposes unless it’s specified in the will. So if your kids live with you and your new spouse, and you want them to stay with your new spouse and not go to their biological parents or the grandparents or something like that, you need to specify that, right?
It’s not always going to work with parental rights. Trump’s what the guardianship designation would have, but it at least lays out your wishes in that regard. Right? Naming explicit guardians for minor children in a will, addressing the role of stepparents versus biological relatives, can often avoid disputes and make sure you have a backup, right?
Make sure you have a backup to account for scenarios where there’s a problem with a remarriage or and a strange family member to make sure that things are clear and really, it comes down to if something happens in your marriage or relationship with your kids, take a look at your estate planning documents, regular reviews of your estate plan.
Save tons of money, save a lot of hardship and bad feelings, and [00:14:00] contested events and cases, and they reflect current dynamics, right? I have clients all the time where, well, I’m giving everything to all my kids, but I haven’t talked to this one for 20 years. Well, why? Why aren’t you changing that? Why are you giving them the same amount as everybody else that’s been in your life, and that you’re giving that one, you know, a full share, and they’ve never even been around?
So look at that kind of stuff. Make sure your estate planning documents are right, but also make sure your beneficiary designations are right. You often forget, like I’ve got a 401k at work, or I’ve got this life insurance policy. You don’t remember who your beneficiaries are, so you wanna make sure you update beneficiary designations when you’re divorced, when you’re married, when you have a new relationship, when you have a kid, make sure your life insurance, your payable on death accounts, you know those all supersede your will and if they favor your ex-spouse, it might be a problem.
Right? Or a kid that you wanna disinherit, it could be a problem.
So the ultimate bottom line in this, and this [00:15:00] is the theme maybe of today’s episode, is that fairness wins. Be fair, be transparent, and make your plans so no one’s left fighting about it, or worse, they’re totally outside of the family. Fairness may mean unequal distributions based on need or prior support, especially when balancing the community’s property rights of a surviving spouse with a kid’s inheritance, right?
But fairness trumps if you do your plan through a trust, you avoid the probate where you’re gonna have less conflicts, probably you’ll have less costs, and ideally, and most likely less contentions. Okay. Thoughtful planning overall, though, which includes clear communication and tools like trusts and wills that are properly drafted.
Ensure that your assets are distributed equitably, fostering family unity. So you wanna make sure that your transparent, we’re going bottom line, James, gimme the gist of this thing. Be [00:16:00] transparent. Have a plan. And make sure that the plan thinks about what about my previous kids? What about my current kids?
What about my spouse’s kids? What about my spouse? And who’s gonna be in charge of all that? Who’s dealing with it? Put someone that you really trust, that’s even-keeled and smart, competent, that has an inkling toward dispute resolution. That’s good too. Okay, so that’s it for the episode today. Tune in next week.
This is gonna be a crowd pleaser, I’m pretty sure. Pet trust and estate planning, securing your furry friend’s future, little alliteration there. Pet trust is under under-discussed topic. Anyway, I’d like to thank you for listening to today’s episode of Legacy Talk. If you’d like today’s episode and would like to learn more.
Please like and subscribe for more great content. I’m your host, James Jones, to your legacy.
Thank you for listening to the Legacy Talk podcast by attorney James A. Jones. If you found today’s episode helpful, we ask that you like and 00:17:00 follow us on all major platforms so you don’t miss out on the latest episode. If you have questions for Attorney Jones, reach out at info@joneslegacylaw.com or visit our website at joneslegacylaw.com.
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