Default intestacy laws can leave half-siblings, stepchildren with diminished inheritances

Ensuring your financial wishes are carried out for the loved ones in your blended family can be complex regarding financial and estate planning.

First, you need an understanding of inheritance laws in your state. And state inheritance laws vary substantially for stepchildren and half-siblings. Suppose you do not understand the legal definitions for stepchildren and half-siblings. In that case, the wording of your will might not carry out your intended wishes for property distributions. Depending upon your state, the legal definition of “all my children” might be different than your understanding of the words.

Second, you must actually draft and execute a will. This sounds like common sense, but sadly about 60% of Americans do not have a will. And if you die intestate, your state's intestate succession laws will determine how your estate is distributed.

When there is no valid will, state intestacy laws determine who will inherit the estate property. Every state is different, and it is crucial to know the laws in your state.

Here is a general guideline:

Not all property is subject intestate succession

Your state's probate court will administer the intestate estate. But even with a valid will, not all property is passed by a will or subject to probate. These assets are usually financial accounts or instruments with contractual instructions to transfer the assets to a designated beneficiary upon death.

If you named your spouse, stepchild or half-sibling as the designated beneficiary, they would receive the assets upon your passing. These assets do not become part of your estate, and the state probate court will not decide who receives this property.

Some examples are:

• Proceeds from a life insurance policy
• Assets held in joint tenancy, tenancy by the entirety, or community property with right of survivorship, like bank accounts, real estate and similar assets
• Funds in a payable-on-death (PoD) bank account
• Property in a living trust
• IRA or retirement funds with a named beneficiary
• Transfer-on-death (ToD) accounts, like for stocks or other securities real estate
• Other assets with ToD language in deeds or titles, like some vehicles or real estate

General rules of intestate succession

Most wills name an executor to help administer the estate. If you die intestate, your state probate court will choose someone to fill that role. Each state has a preferred list of types of people to call on for this responsibility. Customarily, the spouse or registered domestic partner is called on first. If they are not alive or choose not to serve, the court usually chooses adult children, followed by other family members.

Most state intestacy laws only allow spouses, registered domestic partners and blood relatives to inherit. Unmarried partners, friends and non-blood relatives usually inherit nothing. If the deceased person was married, the surviving spouse usually gets the largest share.

When there is a surviving spouse and no children, the spouse usually inherits all the property. If there is a surviving spouse and children, the spouse often receives all or a majority of the assets. States have an order of succession for parents, siblings and more distant relatives, which come into effect when there is no surviving spouse or children.

However, even with blood relatives, all states have rules against allowing certain categories of people from inheriting. For example, often certain criminals cannot inherit nor can parents who abandoned their children or refused to pay child support.

An example: Florida intestate succession laws

Although every state is different, here are the intestate succession line in Florida:

• The surviving spouse is the first to inherit. There must be a valid marriage for the surviving spouse to qualify. If there are no children, the spouse inherits everything.
• The children are next in line. If one of the children dies before the parent, then that lineal grandchild may inherit a portion of the estate. For children to qualify, they must be legally adopted or biological children of the parents. Stepchildren are not included.
• If there is no surviving spouse or children, the decedent's parents are next in line to inherit the estate.
• If none of the above relatives are alive, then the decedent's siblings would divide the estate.

Surviving spouse percentages in Florida under intestacy

• If there is a surviving spouse and no children, the spouse inherits 100% of the estate.
• If there is a surviving spouse and children of the spouse and the decedent, then the spouse inherits 100% of the estate.
• But suppose there is a surviving spouse and children of the decedent that are not from the spouse. In that case, the surviving spouse inherits 50%, and the decedent's children also receive 50% of the estate.

The percentages of Florida intestate succession

• The biological or adopted children get 100% if there is no surviving spouse.
• If there are no children and no surviving spouse, then the decedent's parents inherit 100% of the estate.
• If there are no children, surviving spouse, or surviving parents, then the decedent's siblings inherit 100% of the estate.

Many states have intestate succession laws similar to Florida.

Half-blood intestate rights in Florida

While the term “half-blood” seems to be an uncomfortable term for many, it is part of the Florida statutory law for intestate succession.

In Florida, half-blood family members hold half the inheritance rights of full-blood members. For example, suppose intestate succession dictates that full-blood and half-blood relatives must split ownership. In that case, relatives related by half-blood to the decedent will only receive half of what the full-blood relative receive. But if all that remains are half-blood relatives, they are given full inheritances.

Other states are divided on whether to grant half rights or full rights to half-blood relatives.

As a parent or adult children of a blended family, you should know what rights there are for the all the members of the family, including half-siblings and stepchildren.

What is a stepchild?

To understand those rights, it is important to know the legal definitions. A stepchild is a child born to your spouse, or legally adopted by your spouse before your marriage to your spouse. And you have not adopted the child after the marriage.

While stepchildren enjoy most of the same rights as biologically related children, this is not the case in some areas of law like taxes, immigration and inheritance.

What is a half-sibling?

Half-brothers or half-sisters are siblings who only share one parent. Sometimes you will see these siblings referred to in law as half-bloods because they only have genetic blood from one of the parents, instead of both.

Intestate rights of stepchildren

Most states give no intestate inheritance rights to stepchildren for the estate of the deceased stepparent. Only a few states may provide some inheritance rights to the stepchild depending on the specific facts and circumstances. But many states statutorily disallow stepchildren's intestate inheritance rights.

Many parents treat their stepchildren the same as their biological children in every aspect of life, including love, schooling, support, and more. But when it comes to inheritance rights, most states draw a bright line between the inheritance rights of stepchildren and biological children.

Even in wills, this is where the phrase “all my children” might not include your stepchildren when interpreted by your state's inheritance laws. This may, or may not, be your intention. And with intestate rights, the odds are the stepchildren will not inherit. Most states do not recognize a legal relationship between the stepchild and the stepparent.

The notable exception to this rule is if the spouse legally adopts the stepchild. Almost all states treat legally adopted children with the same rights as biological children.

Intestate rights of half-siblings

Most states agree on the lack of intestate rights for stepchildren. But, they are divided on the inheritance and intestate rights of half-siblings.

For example, under Rhode Island intestatcy laws, brothers and sisters with half-blood inherit equally with those of whole blood. The same is true in Georgia, where siblings and half-siblings receive the same share of their inherited estates.

For example, assume a Georgia man has one child, Tommy, with his first spouse. Later he has two more children, Suzy and Billy, with his second spouse. Suzy and Billy are siblings, and Tommy is their half-sibling.

Under Georgia and Rhode Island law, Tommy, Suzy, and Billy all have the same rights to their father's estate. And if their father and his second spouse pass, Tommy has the same rights to both parents' property as Suzy and Billy. The assets will be split equally among the three children.

But states are not uniform in these rights for half-siblings, and it is essential that you know the laws of your state.

For example, in other states like Florida, intestacy laws allow half-blood siblings to receive only half as much as whole-blood siblings. Suppose Robert dies intestate, leaving one full-blood sibling, Charlie, and two half-blood siblings, Debbie and Edie. Under Florida's statutory scheme, Charlie would receive one-half of Robert's estate. But Debbie and Edie each receive only one-quarter of B's estate.

In states like Georgia and Rhode Island, Charlie, Debbie, and Edie would each equally receive one-third of the intestate estate.

Intestate inheritance laws are used when someone dies without a will. Unfortunately, this describes more than 60% of Americans.

Suppose you come from a blended family with stepchildren, stepparents or half-siblings. In that case, it is crucial to know intestate inheritance laws if one of your relatives passes away without a will. If you know your state's intestacy laws, you will know what rights you do or don't have to the intestate estate.

But if you are the parent in a blended family, there is only one reason to know intestate laws. And that is to make sure that your family never has to rely on them. If you die without a will, your state will decide who gets the property in your estate. If you have stepchildren, they will most likely be left out of the inheritance. If there are half-siblings, they may get half of what other full-blood relatives get. Or, they may get nothing at all. These may, or may not, be your wishes.

Your Best Step Forward - No Intestate Inheritance for Your Family

Blended families are more and more commonplace.

But these expanded loving relationships come with family and financial complexities.

There are stepparents, stepchildren, half-siblings, and more. While your family may treat each other lovingly equally, your state inheritance laws may not.

If you do not have a will, the state will decide your family's future after you are gone. And with a blended family, the inheritance laws may not distribute your estate as you hope they might.

For peace of mind and your blended family's financial well-being, your best step forward is to have a will and estate plan. You act now to ensure your assets will be distributed to your children and stepchildren according to your wishes.