Today we finish our two-part series on estate planning for step-children and step-grandchildren.

Implement Estate Planning Strategies
It is important to keep in mind that unless you have adopted your stepchildren, they generally have no legal right to inherit anything from you at your passing. 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 will, he or she is free to leave any remaining amounts to their children (and to leave nothing to your own children) at his or her death, 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 is free to 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 you would like to ensure that your stepchildren or step-grandchildren are treated in the way you intend, it is important to consult us so that we can design or update your estate plan in a way that reflects your wishes.

Will
You may want to 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 responsibly, a will without a trust provision is unlikely to achieve the best results. Alternatively, 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.

Trust
Trusts are often preferable to wills for blended families, as they allow you to exercise more control over what happens to your money and property after your death. If you have remarried, you can provide for your new spouse for his or her life 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. In addition, you can indicate certain purposes for which the trust funds should be used, for example, education, support, etc., and if you wish, you can specify different purposes for your own children and your stepchildren (or grandchildren and step-grandchildren). You can also exclude your stepchildren, or if you are a grandparent, your step-grandchildren, from receiving anything from the trust by not including them as beneficiaries of the trust.
In addition, you can name a trustee that you are certain will be impartial, so that your own children and your step-children (or grandchildren and step-grandchildren) are less likely to have any grounds for alleging 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, which is a list of specific personal property that and names the people you would like to receive each item. It 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, it is especially important in a blended family to explicitly designate the person that should receive any family heirlooms or items having sentimental value.

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, there are other tools that you can use to achieve this goal, such as lifetime gifts or life insurance policy or retirement account beneficiary designations.

Contact Us for Help

If you are concerned about protecting your assets, we can help you. Click here to email us or call us at 309-807-2885 for your FREE 15-minute consultation regarding umbrella policy information to help protect your assets.