Estate Planning for a Blended Family in Retirement

A recently retired couple in their early 60s approached us with a combined net worth of nearly $6 million. Both had children from previous marriages, and while they had been happily married for over 20 years, they understood that blended families require extra care when it comes to estate and tax planning.

We Uncovered a Significant Issue

During our initial review, we uncovered a significant issue: most of the couple’s assets were held in Mr.’s name alone. This structure created serious estate planning risks. If Mr. were to pass away first, his spouse—who was named as executor—would be responsible for a large tax bill. Worse, assets such as the family home or investments might need to be liquidated just to cover taxes and meet the terms of the Will.

Three-Part Planning Strategy

To address their concerns and protect both the surviving spouse and their children, we implemented a comprehensive, three-pronged approach:

Updated the Wills in collaboration with an estate lawyer to ensure their documents reflected their current wishes, reduced potential family conflict, and provided clear, tax-efficient instructions for distributing assets.

Restructured investment accounts, including the use of segregated funds with named beneficiaries, to help bypass probate, enhance privacy, and ensure specific assets could go directly to each spouse’s children—without jeopardizing the surviving spouse’s financial security.

Implemented a targeted income tax strategy to help reduce taxes on their registered accounts over time. This approach not only increased cash flow in retirement but also helped lower the overall estate tax burden, preserving more of their wealth for their family.

Outcome: A Thoughtful & Tax-Efficient Legacy Plan

A proactive and tax-efficient plan that reflects the couple’s blended family dynamics, protects both spouses, and ensures their legacy is passed on according to their values—not lost to unnecessary tax or avoidable

conflict. This approach provides long-term peace of mind for their entire family.