Today, 16 percent of children in the United States live in “blended” families, according to U.S. Census data. Blended families are households that have a stepparent, stepsibling, or half-sibling.

In Pennsylvania, stepchildren do not receive the same treatment as full biological children or adopted children in the case of inheritance, except as regards Pennsylvania Inheritance Tax.  Stepchildren who inherit by will are taxed at the same rate but they do not have the same rights of inheritance from someone who dies without a will.  Biological siblings may have different feelings about a stepchild inheriting what they perceive as theirs as a natural heir. Likewise, a surviving spouse may have the same feelings about their own children’s inheritance.

Transferring an Inheritance

Estate planning for blended families is key to a smooth inheritance process. Open communication about your estate plan is also helpful in managing the expectations of your heirs.

Trying to be equitable among your heirs can be tricky. Don’t assume your spouse and children will work things out after you have passed away. Avoid this common estate planning mistake. It can easily create unnecessary heartache for the loved ones you leave behind.

Carve out some quiet time to identify your most important estate planning goals, particularly how you would like to divide all your hard-earned assets between your various loved ones.

These assets include your house, car, jewelry, other personal items, investments, retirement plans, brokerage accounts, and insurance. If you opt to gift items before your death, be certain you no longer include the asset or property in your estate plan. Even items of little financial value may be an expected inheritance from the perspective of a child.

The goal is to reduce tensions among family members. An experienced estate planning attorney can help you identify and sort through some potential options.

Creating a Trust

Share your ideas with your spouse and agree on a basic approach, including scenarios for who might pass away first. A “revocable living trust” (RLT) is commonly used by estate planning attorneys to ensure that the estate plan agreed upon by spouses is not trashed by: (1) the surviving spouse; (2) spouse of a re-married surviving spouse; or (3) stepchildren of the first-to-die spouse acting as power of attorney for their parent, the surviving spouse. George Vasiliadis, an attorney with the law firm of Vasiliadis Pappas Associates, warns that “a surviving spouse can change her will to disinherit her stepchildren”. Consequently, leaving property outright to a surviving spouse in the case of blended families may not be the best approach. As noted above, this does not ensure that the children (including any children from previous relationships) will ultimately benefit.

With an RLT, for instance, you can leave assets to your spouse while they are alive, with the balance later transferring to your children. This works for an RLT that ceases to be revocable after the first spouse dies. A “Prenuptial” Agreement, that is, a contract entered into between the spouses before marriage, is another useful legal tool. This is particularly important where there exists substantial financial disparity among the spouses. Alternatively, the same protection can be accomplished by a “Postnuptial” Agreement, that is, a contract entered into between the spouses after marriage.

Beware of Will Contests

Parents in blended families should be aware of the possibility of a will contest. Stepchildren can contest a will, seeking the same treatment as a full biological child, if you have named them in a prior will. For example, a will that you wrote before a remarriage creates an opportunity to contest.

Note that your stepchildren have little chance of inheritance without a will. As  noted earlier, in Pennsylvania, as in most states, if you die without a will, your stepchildren will not inherit from you. (Dying “intestate” is the legal term for dying without a will in place.)

In states where they may be eligible, stepchildren could still be last in line to inherit. This may be the case under the laws of intestate succession, depending on where you live.

A stepchild named in a previous will can challenge on the grounds of undue influence, lack of capacity, mistake, fraud, or coercion. If the contested will is thrown out of probate, estate inheritance reverts to the next most recent will. A stepchild must be named in at least one prior will to have “standing” to challenge the will.

If the court finds that all wills are invalid, the state will treat stepchildren as intestate heirs.

While contesting a will is permissible under certain circumstances, there is no guarantee it will be successful. To ensure your loved ones will follow your legacy wishes, consult your estate planning attorney. Professionals in this area will understand the intricacies and nuances of estate planning for blended families. They also may be able to help you problem solve and navigate difficult conversations between parents and children.

What to Know About Separate Wills

A biological parent and stepparent may make their wills simultaneously and agree to leave the estate to one another. Their will may, for example, leave equal shares to biological and stepchildren.

But as explained earlier, a surviving spouse can always change their will upon the death of the other. The surviving spouse may in fact choose to exclude the stepchildren. However, a stepchild could then contest the most recent will and claim that it is invalid. More often, harm occurs before the surviving spouse dies by using or misusing a power of attorney to re-title assets in joint names with stepchildren or changing beneficiary designations. In each of these scenarios, the estate plan of the first-to-die spouse can be defeated.

Work With Your Estate Planner

The attorneys at Vasiliadis Pappas Associates have experience in providing estate planning for blended families and generally. Call us. We can help!