Posted by: Woodfork Law | June 4, 2013

Portability and Blended Families

In modern culture, divorce and re-marriage is a fact of life.  As a result, when it comes to estate planning, many people must consider children and grandchildren from previous marriages.  In these blended family situations, portability many not be the best mechanism for passing assets.  To briefly refresh, in 2010 portability allowed a surviving spouse to use the deceased spouse’s tax exclusion without the necessary of creating multiple trusts. For many, portability is a great advantage because in makes the process much simpler.

However, if you pass with children and grandchildren from previous marriages, and you elect portability, you are relying on your current surviving spouse to provide for them.  The first obvious issue is if your current surviving spouse does not know, or dislikes your children from a previous marriage, he or she may not conserve assets you intended on going to your children. Additionally, he or she may favor his or her own children over the children from your previous marriage.  Moreover, even if your surviving spouse intends to abide by your wishes, he or she may re-marry and the new spouse may not want any assets left to your children.

In conclusion, many estate planners believe portability has been a great advantage in estate planning. However, the blended family may be one situation where it is not such an advantage.



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