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Estate Planning for a Blended Family

Multiple generations standing on a front porch


Due to the high rate of divorce in this county, it is not uncommon for individuals to be married two or more times. Such remarriages frequently involve children, be it children born to a prior marriage and/or children born to the current marriage. However, with the divorce rate for second marriages exceeding 60 percent, it is important for those persons who are remarried with children to have plans in place to protect their children and their assets.

  • Gifts may shield assets from creditors (subject to laws regarding fraudulent transfers)

  • Gifts may decrease the donor’s estate tax liability

However, inter vivos gifting is not an estate planning tool that can be used at the last minute as a solution to an asset protection problem. Such gifting must be undertaken much farther in advance to achieve maximum effectiveness.

Tax Laws

Under current tax law, each individual has a combined gift and estate tax exemption of $5,250,000 (it is unknown how long such exemption will continue, given the country’s $16.75 trillion deficit and the government’s need for revenue; proposals have been circulated to reduce the $5.25 million exemption to $2 million). Additionally, each donor can make up to $14,000 ($28,000 per couple) in gifts per donee per year without triggering gift taxes. In addition, other types of gifts may be made within the blended family completely tax-free, including:

  • Gifts to your spouse

  • Payment of school tuition for a loved one

  • Payment of medical expenses for a loved one

  • Donations to political organizations

  • Donations to charities

Of course, when undertaking a gifting program, it is important to keep enough assets to maintain your standard of living.

*This article is intended for informational purposes only and should not be construed as legal advice. Individuals involved should consult with legal professionals for specific guidance tailored to their circumstances.


Thank you for reading!

Do you still have questions regarding your blended family?

Reach out to our office today to speak to an expert on the matter.

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