Estate Planning Considerations for Families with Stepchildren

February 12, 2021

Blended families need extra attention during the estate planning process because the inheritance rights of stepchildren are not as clear as those of biological children. One of the biggest mistakes you can make is failing to do any estate planning at all.

Passing away without a valid will, referred to as dying intestate, invokes Maryland’s laws of intestate succession. These laws spell out who inherits your estate. Stepchildren do not inherit under the current laws of intestate succession. If you have biological children and stepchildren and you want the stepchildren to inherit from you, you will need to take decisive action and make those wishes known by executing a valid estate plan.

For your stepchild to inherit from you, you must specifically name him or her in your will or trust. If your will or trust simply uses a common phrase, such as “all my children”, that will not include your stepchildren. Using an experienced estate planning attorney to draft this language is imperative to making sure this is done correctly. Many mistakes in drafting can be made that cause unintended consequences.

Another way to include stepchildren is to legally adopt them. Adopted children inherit from you the same way as biological children.

You can also name stepchildren as beneficiary designations on your retirement accounts or life insurance policies. This will allow them to inherit this particular asset but does not extend to other assets. A stepchild can be listed as the Payable on Death (POD) beneficiary for your bank accounts which will allow the bank to transfer funds to the stepchild upon your death, bypassing the probate process. To include a stepchild in real estate transfers, add them as a joint owner with right of survivorship. As you can see, there are many ways to provide for a stepchild, but they require planning and action.

One other very important circumstance to consider involving stepchildren and inheritances is when you do not want your property to funnel through to a stepchild, there are also actions you may need to take to prevent it. A common scenario is that a husband leaves everything to his wife upon death. The widow now owns all the assets and they have a biological child together, she has a child from a previous marriage and then she remarries and has another child from the subsequent marriage. When the wife dies a few years later, those assets then go equally to all three of her children. This may be problematic if the husband intended to provide only for his own biological child who now only gets one third of the inheritance intended. To avoid this situation, the husband should set up a trust for the wife to benefit from the assets during her lifetime but upon her death, the assets then go to his biological child.

To discuss estate planning techniques for blended families, please contact the experienced attorneys at Stouffer Legal in the Greater Baltimore area. You can schedule an appointment with Stouffer Legal in the Greater Baltimore area by calling us at (443) 470-3599 or emailing us at office@stoufflerlegal.com.

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