In modern society, it’s common for complicated family situations to occur. One of the outcomes of this is that the number of step-children in England & Wales is increasing. In terms of inheritance and succession, step-children can create inheritance issues. In this article we look at the types of issues that can arise.
Not Having a Will & The Rules of Intestacy
If you die without a valid Will in place then your Estate is distributed in accordance with the law. These laws are known as the Intestacy Rules and they set out an order of priority for relatives to inherit your Estate in the absence of a Will. This list of relatives does not include step-children. Therefore, if you have step-children that you would like to benefit from your Estate after your death, then you must put in place a legally valid Will specifically naming the step-child or step-children you wish to include.
Defining Step-Children in your Will
English Law states that, for inheritance purposes, the definition of “children” is different from “step-children”. For example, if you had two biological children and one step-child and your Will states that your Estate goes to “your children”, then the law interprets your Will as meaning that you only want to benefit your two biological children and exclude your step-child.
So when you are making a Will and you wish to include a step-child as a Beneficiary, it’s important to know that the Will should refer to the step-child by name (for example, “my step-son Colin”) and not as “my child” or “my children”.
Second Marriages and Step-Children
If a person is married and their spouse has children from a previous relationship, then a common question that arises is: ‘what will happen when one person dies?’
To illustrate the issue with an example, Mr and Mrs Smith are married and Mrs Smith has a child from her first marriage. When Mrs Smith dies, does she want to leave her Estate to Mr Smith or to her child? If she decides to leave her Estate to Mr Smith, will Mr Smith leave his Estate (which now includes the inheritance from Mrs Smith’s Estate) to his step-child, or will he leave it to a different Beneficiary? Does Mrs Smith trust Mr Smith not to do the latter?
This is a common problem that couples face. One option for Mrs Smith is to use a type of Trust in her Will which enables her to place her Estate (or some of it) into a Trust. The Trust would provide an income for Mr Smith and also a right to live in her share of the matrimonial home for the rest of his life. Furthermore, the terms of the Trust would say that, upon Mr Smith’s subsequent death, the money and property in the Trust set up under Mrs Smith’s Will then passes to her child, and not via the terms of Mr Smith’s Will. This is a great way to ring-fence and protect assets for her child but, at the same time, provide a benefit for Mr Smith during his lifetime.
It’s important to take advice when making a Will to ensure that you understand your options so you can make informed decisions. We’re here to guide you through the Will writing process and to answer any questions you have.
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