From our “Ask a Question” Mailbag: Appropriate Assets for the Stepchild Beneficiary

Most Recently Updated July 8, 2018

“At my death I would like to leave a small gift to my step-children. Does it matter what assets I leave them?”

Appropriate Assets for the Stepchild Beneficiary

Appropriate Assets for the Stepchild Beneficiary

Addressing your blended family in your estate plan is a good idea. Though you may not wish to treat your step-children the same way you treat your biological children, by at least mentioning them or giving them a small gift you may avoid hurt feelings and potential conflict.

When a client asks me about a small gift, I like to examine the client’s assets to find a way to make the gift without naming the recipient in the Will. Once you name a person in your will, that person becomes part of the probate notification process and the entire probate. This can increase the time your executor must spend on your estate and the overall costs. It also raises the question of who will pay the Pennsylvania Inheritance Tax due on the small gift.

Life Insurance

If you have a life insurance policy, you can name the step-children as beneficiary of any amount. Life insurance has the advantage of being Pennsylvania Inheritance Tax free and the gift passes outside of probate, reducing the amount of work for your executor. An added advantage is that you can change the amount of your gift at any time without involving your estate planning attorney by simply filing out a new beneficiary designation.

Other Financial Assets

Other assets can be used to make these gifts, such as the beneficiary designations on your IRA or using a Transfer on Death designation on one of your bank or stock accounts. Unlike you life insurance, these transfers will be subject to the Pennsylvania Inheritance Tax, which you should take into consideration.

More Planning Questions?

Deciding which assets are appropriate for specific members of your family is only a piece of the Estate Planning process. By all means, if you want to learn more, please read my more detailed article, Estate Planning Everything You Need to Know.

In Conclusion: Appropriate Assets for the Stepchild Beneficiary

I hope that this article was helpful in explaining asset designation. Further, I included links to even more detailed information on my website so you can learn more. Therefore, please contact me and let me know how I did. Certainly, your comments and questions are welcome!

Let our Estate Planning lawyers help walk you through what can be a confusing process. To begin with, call to speak to one of our experienced estate planning lawyers.  By all means, our lawyers are ready to answer your questions. In fact, feel free to contact our office for a free consultation. Ultimately our goal is to make the process as painless as possible!

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