Estate planning is never one-size-fits-all. For blended families—particularly when each spouse has children from prior relationships—the process requires careful thought and strategic planning. While many couples begin with simple “mirror wills,” leaving everything to the surviving spouse and then equally to all children, this arrangement may not fully protect the interests of each spouse’s biological children.
Consider the following scenario: A married couple in Illinois has a combined estate of $10 million. Each spouse has two adult children from a prior marriage. Their estate includes $2 million in real estate and $8 million in stocks and bonds. They have mirror wills: each leaves their share to the surviving spouse, and upon the death of the survivor, the estate is to be divided equally among the four children.
At first glance, this seems fair and straightforward. But complications can arise. Suppose the husband dies first. His assets pass to his wife. However, the wife and the husband’s children from his prior marriage have a strained relationship. The wife, now the sole owner of the full estate, is free to change her will. She might, whether intentionally or not, disinherit her late husband’s children. Additionally, if she has a tendency toward excessive spending, the estate could be depleted before anything is passed on to the next generation. In either case, the husband’s children may receive little or nothing of their father’s legacy.
As with all information on this website, this post is informational in nature and is not to be relied upon as legal advice. Consult with an attorney for counsel specific to your circumstances.
Planning Strategies to Consider
To prevent these outcomes, couples in blended families may wish to consider estate planning tools that provide both for the surviving spouse and for the children from prior relationships. Below are several strategies designed to strike this balance.
1. Qualified Terminable Interest Property (QTIP) Trust
A QTIP trust allows one spouse to provide income and support for the surviving spouse during their lifetime, while preserving control over the ultimate distribution of the trust assets. The deceased spouse’s assets are placed in the trust, with income (and possibly principal) distributions made to the surviving spouse. When the surviving spouse dies, the remaining trust assets are distributed according to the original spouse’s wishes—typically to their own children.
In the scenario above, the husband could direct that his half of the estate be placed in a QTIP trust upon his death. His wife would receive income for life, but the principal would be preserved for his children. This provides ongoing financial support for the wife while ensuring that the husband’s children are not disinherited.
2. Bypass Trust (Credit Shelter Trust)
A bypass trust allows a spouse to use their federal estate tax exemption (currently $13.61 million in 2024) to fund a trust that benefits the surviving spouse and/or other beneficiaries. Like a QTIP, it can provide income to the surviving spouse, but may also allow distributions to children during the surviving spouse’s lifetime.
This strategy can help ensure that the assets are not fully controlled—or spent—by the surviving spouse. In Illinois, there is no state estate tax for estates under $4 million per person, but estate tax planning may still be a consideration for couples with sizable estates.
3. Irrevocable Trust for the Children
Some spouses prefer to make an immediate gift to their children from a prior marriage. This can be accomplished through an irrevocable trust that becomes effective upon death or is funded during life. This removes the assets from the surviving spouse’s control entirely and ensures that the children receive their inheritance regardless of future events.
The amount placed in such a trust can be tailored to preserve the majority of the estate for the spouse, while still setting aside a meaningful portion for the children.
4. Life Insurance Trust
Purchasing a life insurance policy and placing it in an irrevocable life insurance trust (ILIT) is another effective method. Upon death, the policy pays out to the trust, which then benefits the insured’s children. This can provide liquidity and certainty, reducing the risk of conflict between a surviving spouse and children from a previous marriage.
In the above scenario, the husband could purchase a policy naming his children as beneficiaries via the ILIT. This ensures that, regardless of what happens to the rest of the estate, his children will receive a fixed benefit.
Prenuptial or Postnuptial Agreement
Although often associated with divorce planning, a well-crafted prenuptial or postnuptial agreement can define each spouse’s property rights and inheritance expectations. In the context of estate planning, such an agreement can reinforce the terms of any trust-based arrangement and help prevent future legal challenges.
Conclusion
Estate planning in blended families must be approached with both compassion and precision. While mirror wills may offer an appearance of fairness, they often leave too much to chance. Trust-based solutions—especially QTIP and bypass trusts—can provide a more secure framework for ensuring that each spouse’s wishes are respected and that their children are protected.
If you are part of a blended family and have concerns about protecting your children’s inheritance while providing for your spouse, consult with an experienced estate planning attorney. The right plan can preserve family harmony and ensure that your legacy is carried out as intended.
Plan with Confidence. Protect What Matters.
If you’re part of a blended family, estate planning doesn’t have to be complicated—or risky. Palley Law helps Illinois families create thoughtful plans that honor relationships, protect children, and preserve legacies.
Schedule a confidential consultation and take the next step toward peace of mind.
