Stepparents Face Unique Estate Planning Issues
Stepparents in a blended family face unique estate planning challenges. When both spouses have children from a prior marriage, it is understandable if each parent wants to protect his or her own child. If the stepparents also have a child of their own together, they may want to ensure all children are treated equally when it comes to financial support or an inheritance. If any of the stepchildren also receive financial support, or will receive an inheritance from, their other parent, this may impact a stepparent’s decision on how much of an inheritance to leave for each child.
There are so many issues that can arise among stepparents when discussing estate planning, it is often a very difficult subject for a couple to discuss. As a result, many stepparents never make a will, which often results in bitter disputes among family members and negative financial implications for the children they leave behind.
If you are part of a blended family, do you know what will happen to your estate if you die without a will? If you have a will, does it accurately reflect how you want your estate distributed? If you have children from more than one marriage or relationship, do you have an estate plan that includes all your children? Browse our free estate planning guide to learn how to leave things the way you want them.
Will My Stepchild Inherit My Property If I Die Without a Will?
If a stepparent dies without a will, the stepchild usually will not inherit anything from the stepparent’s estate. The laws of most states only allow blood relatives or adopted children to inherit from your estate if you die without a will (called dying intestate). If you have not legally adopted your stepchild and you fail to make a will, your stepchild will likely receive nothing from your estate, even if you have raised your stepchild from a very young age. Some states, such as California, have a very limited exception to this rule, so if you are not planning to make a will, check the laws of your state to verify what your stepchild will inherit. Also, in some states, a stepchild can inherit from a stepparent if the stepparent dies with no other legal heirs (no siblings, parents, uncles, cousins or other blood relatives) and the stepparent’s estate would otherwise escheat to the state.
If you want to ensure your stepchild will have financial security or receive something from your estate, you need to make a will or living trust. There are also other ways you can leave something to your stepchildren, such as by naming them as beneficiaries on life insurance, naming them as beneficiaries on bank, brokerage, and retirement accounts or a 529 college savings plan account, making them a beneficiary of another type of trust or adding their names to the title to real estate or other property. If you fail to make a will or living trust, or use one of these other estate planning methods, in most cases your stepchild will receive nothing from your estate.
If you have a biological child and want to ensure your biological child inherits your estate rather than your stepchild, you should make a will. This is important to ensure your intentions are clear and there is no dispute over your estate after your death. If your stepchild tries to make a claim against your estate and a probate dispute arises, it could cost your estate a lot of money to refute the claim, thereby reducing the amount of money your biological child will inherit. Properly executing a will that outlines how you want your property distributed will help protect the interests of your biological child.
If You Want to Disinherit a Child
In some circumstances, a parent may wish to disinherit a child. This can be for a variety of reasons. If a parent has named the child as beneficiary of a life insurance policy, college savings account, IRA, 401K, annuities, bank or investment accounts or has left other property to the child outside of their will, the parent may want to disinherit the child from receiving other assets of his or her probate estate. For more information on making an estate plan so your property passes to your intended beneficiaries, visit our Disinheriting an Heir page.
Making Your Estate Plan
Many people who remarry and have children from a prior relationship have difficulty making decisions about their estate plan. Finding the right balance between providing for your spouse and leaving an inheritance to your children is not easy. Another decision you may struggle with is whether to name your spouse or your adult child as executor of your estate. For information on how to address these issues in your estate plan, see our Stepparents Estate Planning page.