In a blended family, the rules that apply when nobody plans usually favor the new spouse over children from an earlier marriage. A 401(k) goes to the spouse by law, joint accounts go to whoever survives, and a stepchild who was never adopted generally inherits nothing without a will. Fixing that takes up-to-date beneficiary forms, the right trust and a frank agreement between the two of you. A one-time plan from a fee-only planner costs a median $2,000, and an estate attorney drafts the documents.
The rules that decide who gets what
Beneficiary forms beat wills. Retirement accounts, life insurance and accounts with a transfer-on-death designation go to whoever is named on the form. Your will doesn’t change that. See beneficiary designations.
An ex can still be the beneficiary. In Egelhoff v. Egelhoff (2001), the Supreme Court held that a workplace plan must pay the beneficiary named in its documents, even though a state law revoked the ex-wife’s designation at divorce. His children from his first marriage, her stepchildren, received nothing from the policy. In Kennedy v. DuPont (2009), the plan paid an ex-wife who had given up her rights in the divorce decree, because she was still named on the form. Check every form after a divorce, and again after remarriage.
Your new spouse has rights to your 401(k). Most workplace plans pay a surviving spouse unless the spouse signs a written waiver. A prenup alone doesn’t do it: a waiver agreed before the marriage doesn’t count. If you want your children to receive your 401(k), your spouse has to sign a waiver after the wedding. IRAs don’t carry this federal spousal right, though community property states can still give a spouse a share.
A spouse can override your will. In most states that don’t use community property, a surviving spouse can claim a share of the estate whatever the will says, traditionally a third. A prenup or postnup can waive that right in many states.
Joint ownership passes to the survivor. A house or account held jointly with right of survivorship goes to the surviving spouse outright. Whatever your will says, your children receive it only if the spouse later leaves it to them.
Stepchildren aren’t heirs by default. If someone dies without a will, state law gives priority to the spouse and their own children. A stepchild who was never adopted usually isn’t included.
The tools planners use
A QTIP trust. A qualified terminable interest property trust pays your surviving spouse all of its income for life, and nobody can redirect the principal while they’re alive. When they die, what’s left goes to the people you chose, usually your children. It still qualifies for the estate tax marital deduction.
A revocable living trust for the main assets, so the plan is written down in one place and avoids probate. See revocable living trust.
Life insurance for the children. A policy payable to your children, or to a trust for them if they’re young, lets you leave the house and retirement accounts to your spouse without leaving the children out.
Portability. A married couple can combine federal estate tax exemptions, $15 million a person for deaths in 2026, if the first spouse’s estate files a timely Form 706 to elect it. Estates under the filing threshold can still elect it up to five years after the death under Rev. Proc. 2022-32. It matters less for most families, but in a second marriage someone has to agree to file.
A prenup or postnup that says what’s separate, what’s shared and what each side waives, signed with separate lawyers.
Money in the household now
Estate planning is half of it. The other half is the monthly budget:
- Who pays for which children. Child support, school, activities and college for children from earlier relationships. Agree what the household covers and what each parent covers.
- Obligations from a divorce decree. Alimony, child support and any life insurance the decree requires you to keep. Those come first.
- College aid. On the 2026-27 FAFSA, a child of divorced parents reports the parent who gave more than half their support in the last 12 months, and that parent’s current spouse. A stepparent’s income can reduce aid. Plan for it before the forms are due.
- Retirement on two timelines. One spouse may be close to retiring while the other still has young children at home.
Common mistakes
- Leaving an ex, or nobody, on a beneficiary form.
- Owning everything jointly and trusting the surviving spouse to look after your children later. People remarry, move and change their wills.
- One will for the couple’s wishes and two old forms that say something else.
- Naming the new spouse as trustee for your children’s share. Even with good intentions, it sets up a conflict. Many couples choose an independent trustee or a trusted adult child.
- Not talking about it. Explaining the plan to adult children and stepchildren while you’re alive is easier than leaving them to work it out from the paperwork.
When a fee-only advisor is worth it
Almost always, if you have children from before and real assets. The planner’s job is to lay out every account, policy and property, show who would receive each one today, and design what you want instead, then work with your estate attorney to put it in writing. Estate planning and family wealth transfer specialists do this most often. If a divorce is still being settled, start with our guide to a financial advisor for divorce; if you’re inheriting from a parent’s second marriage, see financial advisor for an inheritance.
Choose someone paid only by you. A fee-only planner earns nothing from the life insurance or annuity they recommend, and in a blended family both spouses need to trust the advice.
What it costs
| How you pay | Typical cost (US median) | Suits |
|---|---|---|
| Hourly | $300 an hour | Reviewing beneficiary forms and titles |
| One-time plan | $2,000 | A full map of who gets what, plus the household budget |
| Ongoing planning fee | $4,500 a year | Couples with a business, large retirement accounts or children of several ages |
These are prices fee-only firms publish on their own websites, from the Wellspent fee report. An estate attorney’s fee for trusts and wills is separate. See what a one-time plan costs.
Questions to ask a planner
- How many blended families have you worked with in the past year?
- Will you show us who receives each account today, before we change anything?
- Do you work with estate attorneys who draft QTIP and family trusts?
- Will you meet with both of us, and how do you handle it if we disagree?
- Do you or your firm earn anything other than what we pay you?
Check the last answer on the SEC’s adviser search. See questions to ask a financial advisor for more.
Where to look
In the public graph, start with divorced individuals, mid-life transitions or multi-generational families, or the lists of family wealth transfer specialists, advisors for multi-generational families and divorce financial planners. Newly engaged couples should also read our guide to financial planning when you get married.