Planning an estate for blended families can sometimes be more complicated than traditional estate planning. A blended family must deal with potential conflicts over inheritance among current and previous family members, as well as worry about elevated taxes due to marital status. It can be challenging to divide assets among heirs according to the wishes of the person dying while minimizing consequences of estate taxes and potential hard feeling in the family.

If someone dies without a living trust or will, a probate court will intervene and divide assets among the current spouse and biological as well as adopted children. This division can be further complicated by issues regarding community property and separate property that was brought into the marriage.

The wishes of the person or people planning the estate may vary from the state-dictated distribution.

The state will likely give all children the same amount of assets. You may wish to leave a larger portion of the estate to your children from a previous marriage if they are minors or need additional funds.

Many people wish to leave an inheritance to their spouse's children. However, the state will generally not divide the estate to include them.

The marital deduction allows assets to pass with no estate tax taken out to a current spouse upon death. If everything is left to a current spouse to avoid estate tax, children from a previous marriage could end up without an inheritance. Strategies are available that allow a trust to be left to a current spouse for the rest of their lifetime, with as much access to the principal amount as you would like. When your spouse dies the funds can be directed to the children.

Source: The Spectrum "Accounting for blended family in an estate plan" April 23, 2011