Along with your will and trust, beneficiary designations on financial instruments and accounts such as insurance policies, annuities, and retirement accounts play a significant role in the estate planning process. When you make a beneficiary designation, you are choosing who will receive a substantial asset. You need to look at your beneficiary designations holistically to make sure they comport with your goals and objectives.
The problem is that the changes that happen throughout life can change those goals and objectives. Every year that goes by can see dramatic alterations in your life circumstances, no more so than if you get married to someone with children from a previous relationship. The stepchildren who are now close to your heart as part of your blended family were likely not even a gleam in your eye when you created your estate planning documents years or decades ago. Those have been safely tucked away, gathering dust while you have been doing just the opposite.
Your Stepchildren Get Nothing Unless You Do Something
If your will and estate planning documents make no mention of stepchildren, or if you pass away without a will, your stepchildren have no rights to the assets that will be distributed either according to your will or Michigan’s laws of intestacy. So, while the passage of time and your new family may have changed your life, you actually have to change your estate planning documents yourself (with an experienced estate planning attorney, of course) if you want to include your stepchildren in your estate plan.
While you should always consult with a lawyer before making changes to your estate plan, the following are general steps you need to consider if you want your stepchildren to receive any part of your estate after you pass away:
- Modify the language in your will and trust to explicitly include stepchildren along with (or in place of) the “children” likely referred to in those documents.
- Update the beneficiary designations in your 401(k), IRA, pension plan, life insurance policies, and other non-probate assets to include your stepchildren if so desired.
- If you want your stepchild to be the one empowered to make healthcare and financial decisions on your behalf if you are incapacitated and unable to make such decisions yourself, change your power of attorney and advance directive documents to name your stepchild as your agent under those documents.
- Similarly, if you want your stepchild to be your personal representative charged with managing your estate and distributing assets after you die, or if you’re going to name him or her the successor trustee for your trust, modify those documents accordingly.
In addition to taking the legal steps needed to include your stepchildren in your estate plan, you should also consider discussing your intentions openly and honestly with any biological children you have from a previous marriage. If your plans include altering or reducing what those children expect to inherit after your gone, full disclosure today can reduce the chances of disruptive, costly, and emotional conflicts between your children and stepchildren tomorrow.
Contact Kreis Enderle to Make Sure That Your Estate Plan Has Kept Up With Your Life
If your blended family has scrambled your estate planning objectives, you can bring clarity, certainty, and peace of mind to yourself and your family by meeting with one of Kreis Enderle’s estate planning attorneys. Together, we can keep your estate plan up to date and aligned with your objectives.