Adding stepchildren to your estate plan
Many second marriages result in blended families. In California, unfortunately, many of the state’s laws with respect to estate planning do not recognize the rights of stepchildren unless stated explicitly in the estate plan(s) of their parents.
The unforeseen death of one of the parents in a blended family could create challenges to inheritance rights if the couple neglected to prepare an estate plan or never updated their existing estate plans.
If you die without a will, your estate is subject to the intestate succession laws of the state of California. Intestate laws provide the “order” of inheritance rights for surviving family members, with the spouse being first in line followed by the children.
The term “children” only refers to biological children or to those that have been legally adopted under that law. Stepchildren do not share the same inheritance rights as biological or adopted children; they do not inherit until all the relatives directly related to the stepparent have inherited from the estate.
Protecting the family
Fortunately, there are estate planning protections that you and your spouse can take to ensure there will not be inheritance issues for the stepchildren. What are some estate planning options for leaving your stepchildren an inheritance:
- Prepare a will listing the full legal name of each one of your beneficiaries plus the specific percentage of your estate that you want them to inherit.
- Update the beneficiary designations on your retirement accounts, pension plans, life insurance policies and other non-probate assets to include your stepchildren.
- Consider establishing a trust. Living trusts are often used in estate planning for blended families to provide for the surviving spouse. And they ensure that stepchildren are included in the distribution of assets.
- Choose a person you trust as your financial power of attorney, someone who will act on your behalf if you become incapacitated. In the POA document, include specific instructions regarding your stepchildren.
There is a loophole in California intestate laws that pertain to stepchildren. A stepchild can be included in the process if their stepparent was in their life from childhood on, and the court finds convincing evidence that the deceased would have adopted their stepchild, but was prevented from doing so due to some legal issue.
Peace of mind
Including stepchildren in your will, trust, and other estate planning documents ensures you have an estate plan in place that accurately reflects your wishes concerning the distribution of your assets after your death.
Adding stepchildren as beneficiaries of your trust will require you to make amendments to your original instructions. Click here to learn more about how to amend a living trust.
Whether you are updating your existing legal documents or creating a new one, contact the Law Office of David W. Foley for advice and guidance concerning estate planning for blended families.