No Laugh Track: How Blended Families Can Avoid Minnesota Estate Planning Pitfalls
Claire Dunphy of Modern Family fame once aptly said of her children, “Look at them: A minute ago they were babies, and now they’re driving, and soon we’ll all be dead.” Perhaps Claire was ready for some estate planning!
Whether you’re streaming seasons of Modern Family or watching classic reruns of The Brady Bunch, blended families provide plenty of comedy fodder. From Jan Brady’s outrageous wig to Phil Dunphy’s tightrope, blended family sitcoms are full of iconic moments that make us laugh. The complications of stepchildren feel much more lighthearted when they’re accompanied by a laugh track, but the reality can be much more serious. That’s why careful estate planning is a necessity for blended families in Minnesota.
Blended families are built on love and compromise, but their estate planning cannot rely on assumptions. The traditional "I leave everything to my spouse" plan often breaks down in blended families, leading to unintentional disinheritance or family friction. Because grief and loss come with enough pain on their own, proactive estate planning is the best way to avoid extra emotional distress by providing financial security for your spouse and a protected legacy for your children.
Minnesota’s Defaults
If you die without a will or trust in the state of Minnesota, the intestate succession laws determine who gets what. Here’s a basic look at those current guidelines:
● If no descendant of the decedent (the person who has died) outlives the decedent: the spouse gets the entire estate.
● If all of the surviving descendants are also the children of the spouse who is still living AND the surviving spouse has no other children from a prior relationship, then the spouse gets the entire estate.
● If either or both the decedent and the surviving spouse had children from a previous relationship, then the spouse gets the first $225,000 plus half of the remaining balance. The other half is split by the descendants of the spouse who died.
● In all of these scenarios, the stepchildren have no inheritance rights unless they are legally adopted.
While the above scenarios might work for some families, for many they result in hurt feelings, accidental disinheritances, probate court, and potentially a legal mess.
Potential Pitfalls
One pitfall may result if you assume your surviving spouse will inherit the entire estate and then eventually pass it on to the kids. While this might happen, it’s not a guarantee. Once assets have passed to the surviving spouse, they are theirs, and they are free to do whatever they want with them. Even if you verbally discuss plans to leave a specified amount to your children eventually, the surviving spouse can invest it all in crypto, take an epic world cruise, or pass the entire estate on to their own children, completely bypassing the children of the spouse who died.
So if Mike Brady had simply left everything to Carol in a basic will, his three boys would have had to rely entirely on Carol’s goodwill—rather than a legal authority—to ever see a dime of their father's legacy.
Similarly, a pitfall can occur if you plan to write your spouse completely out of your will to benefit your kids. In Minnesota, the surviving spouse has a legal right to claim an “elective share” of the “augmented estate.” The amount is determined by the length of the marriage, meaning there’s no way to pass everything to your children with a basic will. Because of homestead protection, your spouse also has a right to live in the family home until their death, at which time ownership will pass to your children.
Avoiding Pitfalls
There are a few courses of action to consider and take to help prevent these pitfalls for your loved ones.
● Living Trusts: These important documents can provide income or support for a surviving spouse during their lifetime, while also making plans to pass an inheritance to your children.
● Collaborative Pre/Postnuptial Agreements: Signed, valid agreements can be used to waive or modify elective share rights for surviving spouses.
● Beneficiary Designations: Life insurance, IRAs, and 401(k)s bypass a will entirely. They need to be explicitly updated to avoid accidental distribution.
● Transfer on Death Deeds (TODD): Another essential part of estate planning, these documents allow real estate to be transferred smoothly without the probate process.
Pitfalls Beyond Assets
While much attention is given to estate planning for blended families after death, you can’t forget to also make considerations for the documents that are active while you are still living. A health care directive will name someone to make medical decisions for you if you’re incapacitated, preventing painful medical disputes between a spouse and adult biological children. Similarly, a financial power of attorney will do the same for financial decisions.
Protect Loved Ones with Custom Planning
Just as Gloria would have wanted to make a clear plan for Manny in Modern Family, and Carol and Mike surely had legal documents signed for their beloved crew, so your blended family deserves a custom plan with legal strategies as unique as your special family! Miroslavich Law, an experienced estate planning law firm, is ready to help you preserve your assets and your family harmony. Contact us today for a complimentary consultation.
