Gabriel Katzner - December 2, 2019 - Estate Planning
Estate Planning for stepchildren and step-grandchildren

The structure of families has changed in the United States in recent decades.  According to statistics cited by the Pew Research Center, six out of ten who remarry are part of blended families, and in about half of those remarriages, stepchildren live with the remarried couple. If you or your grown children are part of a blended family, your estate planning must reflect your special circumstances.

Clarify Your Goals

Each family has its own dynamics and priorities that must be considered during estate planning. Many factors will have an impact on your decisions, especially if you remarry and your new spouse has children, or if one of your adult children is in that situation. The decision about whether to provide for your stepchildren or step-grandchildren in your estate plan is important and often emotionally difficult. You’ll need to think about: 

  • Age. When you remarry, the ages of both you and your new spouse and the ages of your stepchildren have an impact on estate planning decisions. If you and your new spouse are older and both financially independent, and all of your children are adults, it may make sense for each of you to leave your assets to your own natural heirs. However, if you and your new spouse are young adults, and your spouse’s children are quite young, it is more likely your new spouse and stepchildren will be dependent on you financially and you will play a role in raising your stepchildren. In this case, you may decide to provide for your stepchildren in your estate plan in the same way you have for your own children. Grandparents may weigh similar considerations in determining whether to include their step-grandchildren in their estate plan. Your decision will depend on your situation.
  • Bloodline. For some people, it is very important that their own children or grandchildren receive the bulk of their money and property. This may hold true even in situations where younger stepchildren are involved and their relationship with those children is strong.
  • Relationship. Unfortunately, some people simply do not get along with their new spouse’s children or grandchildren. Or, if the stepchildren are grown and live in a distant state or another country, there may not be much of a relationship at all. If this is the case, they may feel less inclined to provide for the stepchildren. In contrast, other individuals come to view their stepchildren with as much affection as they do their own children and may want to reflect this relationship in their estate plan.
  • Heirlooms and personal property. You may want to ensure that important family objects go to your own children or grandchildren or to another blood relative when you pass away rather than to your new spouse and ultimately to your stepchildren. This may also be the case if you have items that belonged to a deceased spouse that hold sentimental value for your own children or family members.

Implement Estate Planning Strategies

Keep in mind that unless you have adopted your stepchildren, they may have no legal right to inherit anything from you. Similarly, if you are a grandparent, your step-grandchildren will have no legal right to inherit from you if your child has not adopted them. If you want to leave money or property to them, you must specifically name them in your will or trust. 

Nevertheless, if you remarry and leave all your money and property to your new spouse in your estate plan, he or she is free to leave any remaining amounts to their children (and possibly nothing to your own children), even if that is against your wishes. Likewise, if you are a grandparent and leave money or property to your adult child, and that child dies before his or her new spouse, then the new spouse could receive any remaining amounts and may spend it or leave it to his or her own children. Your child’s spouse would not be under any obligation to leave the remaining money or property to your biological grandchildren. If this possibility concerns you, we can design or update your estate plan in a way that reflects your wishes.

Using a Will

You can provide for your stepchildren or step-grandchildren by naming them specifically in your will. However, if you die while they are still minors or too young to handle the inheritance, you need to add a trust provision to your will to achieve the best results. You can also ensure that your stepchildren do not inherit from you, even if you have adopted them, by specifically excluding them by name in your will.

Using a Trust

For blended families, trusts are most often preferable to wills. Trusts allow you to exercise more control over your money and property after your death. If you have remarried, you can provide for your new spouse and specify any amounts that you would like to give to your own children and your stepchildren, as well as how and when those amounts should be transferred to them. You can also indicate certain purposes for which the trust funds should be used, for example, health, education, maintenance, and support. If you wish, you can specify different purposes for your own children and your stepchildren. You can also exclude your stepchildren, or step-grandchildren, from receiving anything from the trust by not naming them as beneficiaries. In addition, you can name a trustee that you are certain will be impartial, so that your own children and your stepchildren are less likely to perceive favoritism in the way the money and property in the trust are handled.

Personal property memorandum

Some states allow the use of a personal property memorandum, a list of specific belongings, and the names of the people you would like to receive each item. This memorandum typically must be mentioned in your will or trust in order to be valid. You can also include such a list in your will or trust, but those documents can be more difficult to amend if you later change your mind. Regardless of which estate planning tool you decide to use, you’ll want to explicitly designate each person who receives family heirlooms or sentimental items. 

Other planning tools

If you do not want to include your stepchildren or step-grandchildren in your will or trust, but would still like to provide a gift for them or acknowledge your relationship, other tools are available, such as lifetime gifts or life insurance policy, or retirement account beneficiary designations.

We Can Help Design a Successful Estate Plan for Your Blended Family

If your family is one of the millions of blended families in our country today, we can help you create or amend your estate plan to ensure that your wishes for your family members are carried out after you pass away. Please contact us today so we can discuss your unique circumstances and find the best tools to help you meet your goals. 

You can schedule a call with us or reach us directly at 855.528.9637 to learn more about how best to plan today to protect those most important to you.

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