I Love You Wills: Sounds Sweet, But Are They Smart?
Blended families bring unique challenges and rewards. When a couple has children from prior relationships, or perhaps it's a child-free couple with their own sets of nieces and nephews, estate planning becomes a necessity. Without a clear plan, there is a strong risk that your assets won't be distributed the way you'd like.
Understanding the "I Love You Will" Problem
What exactly is an "I love you Will”? It's a common and seemingly straightforward approach where each spouse leaves everything to the other. While this sounds loving and simple, it can create unintended consequences, especially in blended families.
A Real-Life Example: Pat and Sam's Story
Let's look at a real-life example with Pat and Sam. Each had two daughters from prior relationships, creating a family with four children total.
They created what we call "I love you Wills" - each spouse left everything to the other, with their own biological children named as backup beneficiaries. This creates a problematic "last one standing takes all" scenario:
If Pat passed away first, everything would go to Sam. When Sam eventually passed, only Sam's two daughters would inherit everything.
If Sam passed away first, everything would go to Pat. When Pat eventually passed, only Pat's two daughters would inherit everything.
Either way, two of the four daughters would be completely disinherited, which wasn't Pat and Sam's intention.
Better Solutions for Blended Families
There are several approaches to solve this problem. Here are the two most common solutions:
Step 1: Include All Children Equally
Pat and Sam could list all four daughters as equal backup beneficiaries. No matter who passed away first, all four daughters would share equally when the surviving spouse passed away.
Pros:
Ensures equal distribution among all four children
Simple to implement
Creates clear expectations for all family members
Cons:
Leaves assets vulnerable if the surviving spouse remarries
The surviving spouse could change their Will later, potentially disinheriting stepchildren
Doesn't protect against potential creditors or financial mismanagement
Step 2: Create a Trust for Added Protection
For more complete protection, Pat and Sam could create lifetime trusts for each other and name their respective daughters as ultimate beneficiaries.
Here's how it works:
If Sam passes first, his half of the marital assets and all of his separate property would go into a trust for Pat's benefit during her lifetime.
Pat would have access to income and potentially principal from this trust.
At Pat's passing, anything remaining in Sam's trust would go to Sam's daughters.
Meanwhile, Pat's separate property and her share of marital assets would go to her daughters according to her estate plan.
Pros:
Protects the deceased spouse's assets for their children
Provides for the surviving spouse during their lifetime
Remains effective even if the surviving spouse remarries or modifies their estate plan
Can offer protection against creditors
Cons:
Requires more time and legal expertise to set up properly
Involves more administrative work
May have additional costs for trust administration
The Estate Planning Process for Blended Families
Creating an effective estate plan for a blended family typically follows these steps:
Step 1: Family Mapping
We'll begin by creating a comprehensive family tree and identifying all potential beneficiaries, including children, stepchildren, and other loved ones.
Step 2: Asset Inventory
Next, we'll catalog your assets, distinguishing between separate property and community property.
Step 3: Goal Setting
We'll discuss your priorities: How do you want to provide for your spouse? How do you want to ensure your biological children are protected? Are there specific assets you want particular family members to receive?
Step 4: Solution Design
Based on your family structure and goals, we'll design appropriate legal tools—whether simple Wills with contingent beneficiaries, revocable living trusts, or more specialized trusts.
Step 5: Implementation and Communication
Once documents are drafted and signed, we'll discuss how to communicate your plans with family members to set appropriate expectations and minimize future conflicts.
Taking the First Step
Every family is different, and a well-crafted estate plan reflects your unique values and priorities. The "I love you Will" approach might work for traditional families but often falls short for blended families. By taking the time to plan now, you can protect your assets, honor your commitments to all your loved ones, and provide peace of mind for everyone involved.
Estate planning is a collaborative process, and your input is essential to creating a plan that truly works for your blended family. I'm here to guide you through each step with clarity and compassion.
Schedule Your Consultation today and take the first step toward creating an estate plan that provides lasting security for your entire blended family.
Additional Resources You May Find Helpful:
Nolo's Guide to Estate Planning for Blended Families - Options for blended families
National Stepfamily Resource Center - Support and resources for blended families
AARP's Blended Family Finance Guide - Financial planning considerations
