Estate Planning for Mixed Families
Estate planning for mixed families is a bit more complicated, and requires specific consideration of the treatment of stepchildren and the path assets will follow after the death of one spouse. When one or both spouses has children with someone else, intestate succession can have unexpected consequences. Similarly, attempting to use a simple will form or basic template may not have the result you intended.
Posted on January 7, 2018
Intestate Succession in Mixed-Family Situations
Many people mistakenly assume that if they die without a will, trust, or other provision for passing assets to those closest to them, the right people will receive their property automatically. However, intestate succession often plays out differently than people expect, and that is especially true when step-children are involved. Of course, estate planning is important for anyone who wants to be sure that he or she is providing for loved ones. However, estate planning for mixed families is even more critical, as intestate succession is even more likely to have unintended consequences.
Treatment of Mixed Families Under Intestate Succession
In New Jersey, the surviving spouse of a person who dies without a will inherits the full estate—but only under certain circumstances. The rules for intestate succession change completely if either the deceased spouse or the surviving spouse has a separate child. In that situation, a complicated formula applies, routing a portion of the estate to descendants or parents of the deceased. Step-children receive nothing.
For some families, the statutory split will be fine—may even roughly reflect what the deceased spouse would have wanted. However, this unanticipated distribution of assets may have serious unintended consequences. For example, depending on the deceased’s assets and other family circumstances, the diversion of assets to adult children could impact the surviving spouse’s ability to keep the family home. Or, intestate succession could result in the exclusion of an adult step-child who was raised by the deceased and viewed as his or her child.
Special Will Considerations for Mixed Families
While every family situation is different, there are two issues common that must be considered in estate planning for mixed families.
Leaving the Full Estate to the Surviving Spouse
The first special consideration for mixed families is what happens when one spouse leaves all of his or her property to the other. One reason that wills leaving everything to the surviving spouse became common is that there was a tacit expectation that the surviving spouse would, in turn, provide for the couple’s children in his or her will. However, the issue may be more complicated when one or both spouses has separate children.
Imagine, for example, that Jim and Stella are married. Jim has one child from a prior marriage, and two children with Stella. If Jim dies first and leaves all of his property to Stella, he may reasonably expect that the two children they share will inherit from her. If Stella doesn’t have a will when she dies, her children will inherit through intestate succession. But, Jim’s child from the previous marriage will receive nothing, ever, unless Stella makes a point to leave it to him in her will or gift it to him during her lifetime.
Inadvertently Excluding Step-Children
Step-parent/step-child relationships differ significantly. If the couple marries later in life, when their separate children are grown or near-grown, the bonds may be weak. On the other hand, when a step-parent raises a step-child throughout most of the child’s life, the relationship may be no different than any other parent/child relationship. However, the law doesn’t look at the closeness of the relationship or what the step-parent likely would have intended.
A will provision, for example, that leaves the estate “to my children, in equal shares,” will not include a step-child. A step-parent who wants to provide for a step-child in a will or trust must do so explicitly, even if that child falls into the “my children” classification in his or her mind.
An Experienced Attorney Can Help with Estate Planning for Mixed Families
While there are many pitfalls for the mixed family when it comes to estate planning, there are clear solutions as well. Talking with an experienced estate lawyer about how you want to provide for your family is the best first step toward ensuring that your wishes are clearly stated and legally enforceable.
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