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Thursday, April 6, 2017

Planning for Your Stepchildren | How the Law Impacts Blended Families



Summary: Today, blended families are more common than ever. These families may include parents who were widowers, widows or divorcees. In many of these families, a stepparent's relationship with his/her stepchildren may become very close, such that the stepparent desires to include the stepchildren in his/her estate plan. Whether you have stepchildren you want to ensure get a portion of your wealth, or you have stepchildren you want to receive nothing, it is important to ensure that you have a valid estate plan in place, so that you can be sure that your objectives are achieved and you leave the legacy that you desire.

Here, in 2016, the legal standard of "no-fault" is the law in each of the states. California was the first to pass its no-fault divorce law, nearly a half-century ago. With the expansion of these laws has come an increase in divorces among American couples. With the substantial uptick in the percentage of couples whose marriages end in divorce has also come an increase in blended families. In many of these families, a stepparent may come to share a very close relationship with his/her stepchildren, eventually becoming as much of a parent-figure as the children's biological parents. In the classic TV show, "The Brady Bunch," Mike Brady's sons did not know Mike's second wife as "Stepmom" or "Carol." She was just "Mom."

However, the law does not always see things the same way. Generally speaking, unless you have initiated and completed the process of legally adopting your stepchildren, they have no relation to you under the law in most states. This can have a significant impact on your estate if you die with no valid estate plan in place. There is some variation from state to state in the intestacy laws regarding stepchildren and their right to inherit from stepparents. A few states, like Iowa, Kentucky, Arkansas and Missouri (among others,) say that stepchildren can inherit from a stepparent who dies intestate (meaning dies without an estate plan,) but only if the stepparent dies with no surviving relatives of any kind that can be located, and the only other option (besides distributing the estate to the stepchildren) would be allowing the estate to go (or "escheat") to the state treasury.

Others states, like California, say that a stepchild can take from a stepparent's intestate estate if the stepparent desired to adopt the stepchild but some legal barrier preventing the process from being completed. Very recently, a Michigan court case went even further. In that case, the deceased father died with a will, but the court declared that document to be a forgery. As a result, the court declared the man to have died with no plan, and distributed his intestate estate three ways, between a son, a daughter and the man's stepson. In this case, the stepson became an heir solely based upon his having formed a parent-child relationship with the stepfather before age 18 and continuing that relationship until the stepfather died.  

What does all this legal language mean for you? It means that, for the vast majority of people, it is best to get an estate of your own choosing put into place, and not leave your legacy up to the laws of your state of residence. If you have stepchildren, there are two distinct scenarios where allowing your wealth to be distributed according to intestate law can go very wrong. The first situation is if you have stepchildren with whom you are close and whom you want to include in the distribution of your wealth. If you live in one of the majority of states that does not recognize unadopted stepchildren as relatives, then they will get nothing from your assets unless you get an estate plan with a will (or will and living trust) that dictates who you want your beneficiaries to be. With a properly drafted and executed will or living trust, you can ensure that your stepchildren will get the fair share of your assets that you want them to have.

Alternately, you may have stepchildren with whom you're not close and whom you don't want to receive anything. While most intestacy laws say unadopted stepchildren get nothing, laws can change. And you may already live in a state that recognizes unadopted stepchildren as relatives. Again, the best way to make sure that your goals are achieved is to ensure that you have a validly drafted and executed estate plan in place. The law says that you can disinherit anyone except your surviving spouse. Whether someone is a child or stepchild, you can leave them nothing as long as it is properly spelled out in a valid estate plan.  

This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com

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