Living life together as a blended family takes a lot of healthy communication to make things work. Part of that conversation should be how children from previous marriages will be financially supported in the event of either spouse passing away. Estate planning for stepchildren differs from biological children so it is important to discuss their involvement, if any, and have it clearly stated in the will.
Before You Draw Up Your Estate Documents – Talk
Have an honest discussion with your spouse about how you would like to provide for respective children when you’re gone. If it’s likely to be an uncomfortable conversation you can consider calling in your financial advisor or estate planning attorney to be an unemotional facilitator. Other important points to cover are any contractual obligations to previous spouses and guardianship issues, particularly if there are young children involved. Review plans from former marriages to see if anything would affect your new estate plan.
Stepchildren: The Legal Facts
Before you decide how to provide for your stepchildren, it’s valuable to understand your relationship and responsibility toward them in the eyes of the law. These are the key facts:
- If your partner or spouse has children that you haven’t adopted yet, they are your stepchildren.
- If you adopt them, they legally become your children as much as your own flesh and blood.
- Until you adopt them, there is no legal tie between you and your stepchildren. Legally, they are on the same level as a friend or neighbor, and as such are not entitled to an inheritance from you. This applies even if you die without a will.
- If you don’t want your stepchildren to inherit anything from you, you simply do nothing. All states have laws to protect minors who weren’t provided for in a will, but these laws don’t apply to stepchildren.
- To leave any part of your estate to your stepchildren, they will need to be written into your estate plan.
- When making your will, it is best to refer to each child by name rather than terms like ‘descendants’ ‘children’ or ‘heirs’. These terms are particularly confusing when it comes to blended families.
Other Ways To Provide For Stepchildren
There are a number of different ways to provide for your stepchild.
- You can leave a gift for your stepchild using your will. It can be a specific item, a specified amount or a percentage of your entire estate. Bear in mind that whatever you set aside for your step-child will mean less for your biological children and other beneficiaries.
- A living will. Your step-child can be named as a beneficiary of your living trust.
- A special needs trust can be set up for your special needs stepchild if they are eligible for government disability benefits.
- You can name your stepchild as a beneficiary on your life policies or your pay-on-death financial account.
Make Your Reasons Clear
Many families have had their relationships torn apart by the process of ‘who gets what’ following the death of a parent. The grief of losing a loved one threaded through the whole process makes it hard for everyone to think logically and misunderstanding can cause further damage to relationships. The best way to avoid this for your family is to speak to them while you’re still alive. Once you’ve decided who gets what, explain your reasons and give them as much insight into your thoughts as possible.
If it isn’t practical to discuss it with them, write it down. The letters you write won’t carry any legal weight, but you will know in your heart and mind that you’ve done as much as you can to protect the family from more pain once you’re gone. Make sure the letters are in agreement with what is in your will. You can leave them with the other estate documentation.
Ask For Professional Advice
If there is anything that concerns you, or that you aren’t sure of, feel free to contact one of our personal representatives who can advise you of your options.