Blended families are becoming increasingly common. With these changing family dynamics comes the need for estate planning that considers the inheritance of stepchildren. However, this can be a complex process that requires careful consideration of the unique relationships within the family.
Stepchildren do not have the same footing as biological children under inheritance law. So, how can estate owners ensure that the distribution of their assets will be according to their wishes and that their children, even out of wedlock, will receive equal rights to their assets when the time comes?
Let’s consider the options below:
- Legal adoption. Estate owners may ensure that the law considers their stepchildren equal to their biological children by legal adoption. However, this can be tricky, especially if the owner is still married and living with their spouse and biological children. In addition, they must adopt the child before they die if they want to inherit a substantial part of their assets without special provisions. Otherwise, they will need to make other valid arrangements within their state.
- Second-parent adoption for unmarried partners. Legally adopting the child has drawbacks, especially if the estate owner is not married to the child’s parent. Once legally adopted, the child could lose the right to inheritance from the other biological parent due to the severing of ties. For this matter, the estate owner may favor second-parent adoption as another possibility. In this situation, estate owners can still pass their inheritance to the child as a second parent. They may have to process added paperwork, such as a will naming the child their beneficiary.
- Beneficiary Designation. Many assets, such as retirement accounts and life insurance policies, are passed directly to the named beneficiary outside of probate. It’s more practical for some estate owners to appoint their stepchildren as their beneficiaries in a will. However, they must discuss this matter openly with their spouse and biological children. Open communication can help avoid conflicts in the future and ensure everyone is on the same page, especially if the estate owner wishes to leave a large portion of assets to the stepchild.
Estate planning for blended families and securing the inheritance of a stepchild will require careful consideration. But there are options that estate owners can choose to ensure that their estate plan reflects their wishes and supports everyone’s interests.