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Inheritance in step families

floridagirlal's picture

My new DH and I need to change our beneficiaries and wills, etc and I'm wondering how other step families have handled this. My girls and I moved into HIS house that his family gave the land to him and he built the house. We have added a $60K addition that I have paid for with the equity from my old house and my name is now on the deed to his house. So, I now have a significant amount of money invested in this house. How should everything be divided upon our death? He has 1 son and I have 3 girls.


oneoffour's picture

I would say half the amount and then divided amongst the remaining children on each side of the family for the next few years. However if you are still married in 20 yrs change it to 1/4 each.

Or if you are inclined, leave it to the local Humane Society. You can do whatever you want with it as can he.

winehead's picture

If he wants to keep the house and land just for his bio family, you could buy life insurance equivalent to the amount of your investment. Each of your girls can be a benficiary. If having your girls inherit the house is fine with both of you, then there are any number of ways to do this. You just have to decide what feels "fair" to both of you--based on the amount each of you brought to the marriage? Divided by half? Or by 4? Your attorney should be able to talk through various scenarios.

Think about how you'd want inheritance to go if something happened in the next five years. Then revisit in five years and see if you want to change anything. It's too hard to think about a time period much longer than that.

buttercookie's picture

If one of you passes but the other lives the house goes to the surviving spouse, upon death the house is to be sold and split equally between the kids. You said you had 4 so they all get 1/4. Well thats how we have it, but I have 2 and he has 2 so there is not your kids get more than mine. My adopted dad had 2 kids and married my mom who had 3. When we were growing up it was the house was sold and split 5 ways.

christag's picture

DH has a living trust, something he did when we got married to mollify his kids. My kids and I moved into his house, he pays 80% of the bills including mortgage & heloc, but I have put in some. Still, when he goes, the house goes into the trust. I can live there, but after I go, it goes to his kids, nothing for mine. DH's first wife had the same thing. He benefits some from the trust while he's alive, then it goes to his kids. Suppose there's tax benefits, but it seems like trusts are a way of making sure money stays in the family. My kids will get jack squat and his kids will just get richer. Gosh I wish there was a 100% inheritance tax for my spoiled stepkids.

buttercookie's picture

what state do you live in and does he have life insurance? You should get atleast 50% if he passes before you, you still have to live. Sounds like your second fiddle to your husbands kids. I'm not saying he shouldn't do something for them or that he has to give your kids the same he gives his but he shouldn't leave you in poverty either.

lucky2bme87's picture

OK, so I have NO kids and had EVERYTHING before marriage - house, cars, etc. and I currently pay ALL the bills (he is struggling & hopefully after I put him through school, he will graduate & get a decent job to help me out) - I know this is terrible; I think about this EVERY damned day. So, his name is not on the deed. He doesn't contribute any to helping me maintain it, he should not have any claim to it, right? My MIL seems to think after the first year of marriage, it is fair to put his name on my deed. I don't think so. If I were to sell this one and he could contribute to buying another and paying for it, then maybe we'll see. However, if I did what she said and put his name on the deed and God forbid he passed away, wouldn't his little crumbsnatcher be entitled to some of it??? Oh HELL freakin' NO!!!!!

floridagirlal's picture

So, after reading all of the responses, I have an idea of how I may present this to DH. This is what I think:

If he dies:
1. SS inherits house and land. I can choose to live there or not.
2. I get his Railroad Retirement (way better than Social Security).
3. I get 100% of his life insurance
4. I have life insurance that MY kids will get 100%.

If I die:
1. DH obviously still keeps the house and I assume would give to SS upon his death
2. My kids still get my life insurance
3. I wonder if DH is able to get my social security since it's supposed to be Railroad Retirement OR Social Security...not both. Hmmm.....

What do y'all think?

floridagirlal's picture

I guess I should have said that his son will inherit the house upon MY death. If DH didn't have SS, everything would go to me and I could do with it what I pleased. This is only to ensure that his son gets the house and the land upon my death.

momandstep2three's picture

PDH and I have been married for 20 years. I am BM to 2 adult and SM to his son. We are fortunate we look at them all as OURS. THat was our agreement when we got married. They all get along wonderfully. We both had our own money and homes prior to marrying. We sold both places bought one. Our kids were all out of the nest. We each have significant life insurance policy with BK as beneficiary in addition to another policy naming each other as beneficiary. In the event something happens to both of us at the same time the properties, art, cars etc are sold and the bills are paid.

Whatever remains (including substantial life insurance policies on DH and myself) $$$$$ is split equally among all three. There is the occasional exception of jewelry that goes to BD or personal items that one kid has expressed interest in. Everything has been designated and written down filed with estate attorney. Should something happen to just one of us then the assets go to the surviving spouse and the surviving Kid of the deceased has that large life insurance policy in addition to those jewelry and pre-requested items.

Interesting Perfect DH designated SS to be the executor of our will and estate. He felt that his BS would think he was entitled to more and not handle everything as well as it should be. Made me love him even more. BTW we are 60 & 61. We have no grandchildren and only 3 kids get the $$$$$. Spouses of kids are not included in asset distribution. Nothing personal just wanted it that way.