How to fairly divide an estate between multiple children can be a difficult question to answer. It can get even more difficult when the family is not a traditional one.
When people get remarried and they have children from a previous relationship, their estate planning can get pretty complicated.
Consider, for example, a man getting remarried who has two homes and two daughters from a previous relationship. This man decides to create a trust that leaves one of his homes to his two daughters, since that is the house they grew up in. The other home will go to his new wife.
That seems like an equitable solution.
However, the man and his new wife then had a son and also purchased a third home. Now, the question becomes how do they make sure that all of the man's children are treated equally?
How to resolve this situation was the subject of a recent letter to Market Watch as reported in "How do I split my estate between my two stepdaughters and biological son?"
There is no single perfect solution to this situation that will work in all cases.
It depends on how much the woman brought into the marriage and how old her step-daughters were at the time. What will work for one family will not work for another.
If the woman brought few assets into the marriage, then the fair thing to do might be to give her a life estate in the property, but then divide that property up equally between all three children when she passes away. In the man’s trust, he can do exactly that; leave assets in trust to the second spouse so she is supported for the rest of her life, but make sure that assets go to his three children at her death.
If you have a blended family, then visit an estate planning attorney to learn about the options to deal with this type of situation for your family.
Reference: Market Watch (August 8, 2017) "How do I split my estate between my two stepdaughters and biological son?