Blended Family Estate Planning Horror Story: How One Couple Lost Everything

Why Estate Planning Is Critical for Blended Families

As you may know, over half of all first marriages end in divorce. About 60% of second marriages end in divorce, 70% of third marriages, and well the pattern continues.

With remarriages come new relationships, new children, stepchildren, and new financial dynamics. That’s what we call a blended family and while these families can be full of love and connection, they also come with unique estate planning challenges.

Let’s look at a common example that shows how things can go wrong when there’s no estate plan in place.

The Story of Barbara and Jerry

Barbara and Jerry are both in a second marriage. Each has children from a prior relationship, and both love their families deeply.

Like many blended couples, they want two things:

1. To make sure their spouse is taken care of if they pass away first.
   
   
2. To ensure their children from prior relationships eventually inherit something too.

But Barbara and Jerry never got around to creating an estate plan.
No trust, no will, nothing in writing.

Then Barbara passes away.

What Happens When There’s No Estate Plan

Under California’s intestate succession laws, when someone dies without an estate plan, their property generally passes to their spouse.

So in this case, Jerry inherits everything.

That may sound fine at first Barbara trusted Jerry to do the right thing but the law doesn’t guarantee he’ll follow her wishes.

A few years later, Jerry remarries. His new wife, Linda, also has children from a previous relationship.

Then Jerry passes away.

Now, everything that once belonged to Barbara  including what she might have wanted her kids to receive goes to Linda and her children.

Barbara and Jerry’s kids receive nothing.

The assets pass entirely outside of their family line, to people neither Barbara nor Jerry even knew when they were first married.

The Hidden Risk of Blended Families Without a Plan

This scenario happens every day. And it’s not because people don’t care. It’s because they assume “my spouse will take care of my kids.”

But under California law, intentions don’t count. Only legal documents do.

Without an estate plan, state law decides:

• Who inherits your home
  
  
• How your property is divided
  
  
• Which spouse’s family ultimately receives what you’ve worked for
  
  

That’s why estate planning for blended families isn’t just about money. It’s about fairness, protection, and honoring your wishes long after you’re gone.

How to Protect Your Spouse and Children

The good news: you can absolutely protect both your current spouse and your children from previous relationships with a well-designed estate plan.

Here’s how.

1. Create a Revocable Living Trust

A revocable living trust is the most effective estate planning tool for blended families in California.

It allows you to:

• Specify exactly who receives what and when
  
  
• Ensure your current spouse is cared for
  
  
• Protect assets so your children from a prior relationship inherit later
  
  

With a trust, you can direct that:

• Your spouse continues living in your home for life
  
  
• Certain assets are held for their benefit
  
  
• The remaining assets pass to your children after your spouse’s death
  
  

This ensures no one is accidentally disinherited and no third party (like a future spouse) can override your plan.

Learn more: How a Living Trust Protects Your Family and Avoids Probate

2. Use Separate Trusts if Needed

In some blended families, each spouse keeps separate property and creates their own trust.

This can be ideal when:

• You each have adult children from prior marriages
  
  
• You entered the marriage with significant individual assets
  
  
• You want to clearly separate “yours, mine, and ours”
  
  

Separate trusts ensure each spouse’s assets go exactly where intended while still allowing you to support one another.

Your Orange County estate planning attorney can help you decide whether a joint trust or separate trusts fit your situation best.

3. Update Beneficiary Designations

Even with a trust, don’t forget your beneficiary designations on:

• Life insurance
  
  
• Retirement accounts (IRAs, 401(k)s)
  
  
• Payable-on-death (POD) bank accounts
  
  

These assets pass directly to the named beneficiary outside of your will or trust.

If you forget to update them, your ex-spouse or unintended person could still receive those funds.

Pro Tip: Review your beneficiary designations every 2–3 years, and after any major life change (marriage, divorce, or birth of a child).

4. Consider a Marital Trust or QTIP Trust

If you want to provide for your spouse while ensuring that your children eventually inherit, a Qualified Terminable Interest Property (QTIP) Trust might be ideal.

Here’s how it works:

• Your spouse receives income from the trust for their lifetime.
  
  
• After your spouse passes, the remaining assets go to your children.
  
  

This type of trust protects your spouse’s lifestyle without giving them full control over the assets so your children’s inheritance stays secure.

5. Clearly Define Guardianship and Executor Roles

Blended families can sometimes create confusion or tension over who should make decisions.

Your estate plan should:

• Clearly name guardians for minor children
  
  
• Designate an executor or successor trustee who is neutral and trustworthy
  
  
• Include clear instructions for handling family property, heirlooms, or business interests
  
  

Choosing the right people reduces conflict and ensures your plan is carried out as intended.

Common Mistakes to Avoid in Blended Family Estate Plans

🚫 Relying on verbal promises.
If it’s not written in your legal documents, it doesn’t count.

🚫 Leaving everything to your spouse “to handle later.”
This often results in accidental disinheritance of your children.

🚫 Failing to update your old will or trust.
If your plan still names an ex-spouse or outdated beneficiaries, your new family may be left out entirely.

🚫 Using DIY online documents.
Generic templates can’t handle the complexities of blended families, especially in community property states like California.

Related reading: What Does a Complete Estate Plan Include?

Why Work with an Estate Planning Attorney

Every blended family is different.

The number of children, type of assets, and relationship dynamics all influence how your estate plan should be structured.

An experienced California estate planning attorney can:

• Customize your trust to protect both spouse and children
  
  
• Avoid conflicts between stepfamilies
  
  
• Reduce taxes and court costs
  
  
• Ensure your plan complies with state law
  
  

At Pevney Estate Planning, we specialize in helping Orange County families build estate plans that balance love, fairness, and legal protection.

Key Takeaways

✔ ️ Without an estate plan, your assets could unintentionally skip your children.
✔ ️ A living trust allows you to care for your spouse and your kids from prior relationships.
✔ ️ Always update beneficiaries and use QTIP trusts for blended family fairness.
✔ ️  Work with an attorney who understands California community property laws.

Final Thoughts

Estate planning for blended families requires careful balance and clear communication.
You want to protect your spouse without leaving your children behind and the right plan makes that possible.

At Pevney Estate Planning, we help blended families throughout Orange County create personalized, compassionate plans that ensure everyone is remembered and protected.

Schedule your free 30-minute consultation today or call (949) 377-2996  with Michael Pevney, your trusted Orange County estate planning attorney.