Estate Planning Tips When Stepchildren Are Involved

Hi I’m Bridget Mackay of Law Offices of Bridget Mackay in Petaluma, California. I practice in the area of estate planning and elder law.

Today, I want to talk about how we treat stepchildren in our estate plan.

I often get clients who have a relationship with their stepchildren, want to give them something, but don’t feel like they want to give them as much as they’re giving their natural born children. It becomes a dilemma because they don’t want hurt feelings to see in the plan, the children getting a substantial amount more of the estate than the step-children.

In some cases, they don’t want to reflect the stepchildren getting anything in the trust, but they want to give them something. We’ve often come to solutions with giving those step-children a portion of a life insurance benefit or a benefit of an IRA. You don’t have to elect that whole IRA to go to that step-child or the whole insurance policy to go to that step-child. But it is a way to solve that problem of giving them something and recognizing them, but not having to recognize them in bulk as equally as natural children, which is what they may not want to do.

Think of your plan as not just your trust or your will, but all those other assets that are part of your estate. IRAs, annuities, life insurance policies, all of those can have named beneficiaries and they don’t have to be named in the trust. You can even further break down those beneficiaries in percentages. Your children get 90% and the step-child gets 10%. Things like that.

Think outside of the document or outside of the box when you’re looking at your estate plan and you want to provide for a step-child.

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