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When you say “I do,” you’re entering a financial partnership as well as an emotional one. If you say “I do” a second time and have children, your partnership acquires new stakeholders — not necessarily willing ones. Adult children have expectations about how much they’ll inherit and how soon. A new spouse scrambles that calculus. “Stepparents and stepchildren are natural competitors,” says estate-planning attorney Mark Accettura, author of Blood & Money: Why Families Fight Over Inheritance and What to Do About It. “It’s the number one source of conflict in my practice.”
All should be well if you and your spouse are each financially independent and leave your own assets to your natural heirs. But if one spouse depends on the other for support, assets will have to be tied up for that spouse’s lifetime. In cases of May-December marriages, children of the older spouse might have to wait an extra 15 years or more before any money comes their way. No smiles there.
Nevertheless, your first responsibility is to your spouse. When you write a prenuptial or postnuptial agreement or update your wills, you’ll each want to be sure that the other will have enough to live on if left alone. A surviving spouse does have the right to claim certain amounts of the late spouse’s assets, in the absence of a will or proper prenup. The award can be large or a trifle, depending on state law — be sure you know which.
At the death of the first spouse, distribute at least a little cash to all the adult children, equally. It’s not so much the amount as the signal that you cared.
In families with good (or good enough) relationships, children and stepchildren should be treated the same in wills. If there’s a reason not to, the results should still seem fair. For example, take a man with a young second family. He might set aside enough for their education and divide the rest of the children’s money equally.
A persistent source of conflict is the division of personal property, says John Scroggin, an attorney with Scroggin & Co. in Atlanta. First-family heirlooms might be claimed by second-family children — in the worst case leading to lawsuits. You and your spouse can help by signing and dating a list of where important items should go and attaching it to your will.
If you leave everything to your spouse, you can’t be sure that your natural children will ever inherit any money. That’s because, after your death, the ties between stepparent and stepchildren might fray. Your spouse’s children will murmur, “You haven’t seen Freddie for 10 years — why leave him 30 percent of the estate?”
To preserve inheritances, it helps to leave money for children in trust, with income to the spouse for life. Still, the spouse can effect changes. “In real life, the survivor wins,” says Martin Kurtz, a financial planner at the Planning Center in Moline, Ill.
Memo to self: Discuss options with a lawyer. Memo to children and stepchildren: Keep in touch.
Jane Bryant Quinn is the author of How to Make Your Money Last.