Estate Planning for California Blended Families

Blended families are an extremely common makeup of today’s American families. Unfortunately, California estate laws do not make provisions for these loved ones. In order to make sure your blended family members are properly cared for by your estate, partner with a qualified estate planning attorney.

What Is a Blended Family?

Any family composed of stepparents, step-siblings, or half-siblings, as the result of subsequent marriages, is considered a blended family. Many children in the US live in a blended home. Some estimates report that around half of American marriages are remarriages.

However, despite the normalcy of blended families in America, inheritance law in California does not make provisions for blended family members to receive any portion of a decedent’s estate. For this reason, drafting and establishing an estate plan is essential for California blended families.

What Happens if There Is No Estate Plan?

If there is no existing estate plan that would otherwise lay out your wishes upon your passing, then everything you own will be accounted for, named, appraised, and dispersed to your next of kin by the court in a legally set probate process. The court follows a tight succession plan when determining next of kin.

Firstly, community property, also known as shared or marital property, will go completely to the surviving spouse. Everything else is considered separate property and will be divided among other family members. The succession order of kin is as follows:

• Spouse
• Children (biological or born during the marriage)
• Parents
• Siblings
• Aunts and uncles
• Nephews and nieces
• Grandparents
• Cousins

After cousins, if no other eligible heir can be found and contacted, then the state claims the estate as unclaimed property until one can appear. Please note that blended family members — those who are related by marriage but not by blood — are not listed in the state’s success plan. If you pass away without an estate plan, stepparents, step-siblings, and stepchildren will not be eligible to receive your inheritance.

Incapacitation and Blended Families

In addition to the consequences for inheritance for blended families where there is no estate plan, there are also legal repercussions for medical care. Without an estate plan that would otherwise outline power of attorney, your blended family would not have any legal say in your care if you were to become incapacitated. This means that stepchildren, for example, no matter how close they may be to you, would be unable to approve or deny medical care or procedures on your behalf.

How to Properly Set Up an Estate Plan for Blended Families

There are several legal documents you can draft that will establish a comprehensive estate plan for your entire family, including blended family members. Here are a few of the most relevant:

• Create a living will. By drafting a will, you can clearly and legally establish any beneficiaries you choose, including stepchildren, godchildren, siblings by marriage, or any other blended or extended family members. Additionally, you can list out exactly who gets what and how much. This can be especially helpful in ensuring that children are treated equitably despite biological relationships.
• Establish powers of attorney. A power of attorney grants an individual decision-making power over another. In the event you become incapacitated, temporarily or permanently, a power of attorney will grant one or more persons the legal capacity to make decisions regarding your health and well-being or your finances and estate, depending on how the power of attorney is designated.
• Set up a trust. A trust can be set up to fund assets and property to be managed by a person or persons of your choosing, known as trustees. Often, individuals will set up a trust for their children to hold, invest, and manage their inheritance. Funds can be accessed when they come of age, or the trust can be set up to disperse funds as a monthly income or until certain provisions are met, such as marrying or graduating college.

By establishing a proper estate plan, you maintain control over who will receive inheritance or care for you and your estate in the event of your incapacitation. Because of the flexibility of estate plans, you can effectively include any desired blended family members in the plan.

FAQs

Q: How Much Does an Estate Plan Cost in California?

A: The cost of drafting a comprehensive estate plan in California will vary depending on several factors. Generally, you can expect the cost to range between around $1,500 – $5,000. The complexity of the estate plan, your attorney’s experience level, and the types of documents drafted in your estate plan will affect the cost. Despite the upfront costs required to establish an estate plan, doing so actually provides long-term savings by avoiding lengthy probates and eases the process for your loved ones later.

Q: What Is the Inheritance Law in California?

A: California inheritance law can be both comprehensive and complex. Generally, when a person dies, all shared or marital property now belongs to their spouse. Separate property is split between the spouse and any surviving children. If the person has no children, the separate property is split between the spouse and the decedent’s parents. Typically, blended family members, such as stepchildren, do not automatically inherit any of a decedent’s estate. This is why estate planning is important for blended families.

Q: What Are the Three Elements of an Estate Plan?

A: There are three basic elements to creating an estate plan:

1. Last will and testament. This document provides an outline for delineating assets and property to individual beneficiaries.
2. Power of attorney. This document provides an individual with decision-making powers over the ward’s personal well-being or estate, including finances, business, and assets.
3. Advance health care directive. This document outlines an individual’s wishes for medical decisions made on their behalf in the event they become incapacitated and unable to make those decisions themselves.

Q: Do Beneficiaries Have to Pay Taxes on Inheritance in California?

A: In California, beneficiaries do not need to worry about paying taxes on inheritance, as there is no state-level estate or inheritance tax. If, however, the inheritance later produces income, either through interest accrued on an investment made with the inheritance or through other means, the beneficiary will be responsible for paying taxes on the income produced. If the estate exceeds $12.92 million, however, the beneficiary will owe federal tax on the inheritance.

Contact a Skilled Estate Planning Lawyer

If you have an extended or blended family that you wish to ensure will be included in your estate, talk with a qualified and experienced California estate planning attorney to begin setting up a new estate plan or to update an existing estate plan to include blended family members. Contact our office at the law firm of Robert G. Petrovich, Attorney at Law, today.