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How to Protect Assets From Stepchildren


Parents in second marriages may want to leave assets to their own children while ensuring that stepchildren do not inherit. When stepchildren inherit, it can create resentment leading to legal disputes that can cost the estate significantly in delay and attorney fees. By taking specific estate planning steps, however, you can effectively protect assets from stepchildren. A financial advisor can inform you about your options when planning an estate involving stepchildren.

Stepchild Concerns

Estate planning is nearly always worthwhile but can be extra important when you have stepchildren. If a stepchild inherits some of your assets, your own children may feel they have been cheated of their rightful inheritance. To protect their interests, children and other heirs may contest awards to stepchildren. Court cases from these efforts can delay settlement for years while legal fees reduce the size of the estate.

Your children are recognized as heirs to your estate even in the absence of a will or other document naming them as beneficiaries. Stepchildren do not have the same rights. In most cases, they do not inherit from a deceased stepparent’s estate unless specifically listed as beneficiaries in estate planning documents.

However, stepchildren still may receive assets from your estate if your spouse dies after you and leaves assets to their children. Preventing stepchildren from ever receiving assets from your estate can be done, but requires definite action to exclude them as beneficiaries.

Protective Measures

how to protect assets from stepchildren

If your partner from a second or later marriage dies first, you usually don’t have to do anything to prevent stepchildren from receiving assets you control. Even after an intestate death that occurs without a valid will, stepchildren are typically not recognized as having any right to assets in the estate. However, a few states do grant stepchildren some rights of inheritance. If you live in one of these jurisdictions or just want to be sure, you can take protective measures.

Using a Will

A will can be used to name specific people, including stepchildren and exclude them from receiving benefits from the estate. Simply leaving the names of any stepchildren out of the last will and testament is likely to be enough to keep them from acquiring any of your assets after your death. To be certain, you can designate by name stepchildren and anyone else you don’t want to get any assets when you die.


A trust offers a more reliable method that works in nearly any circumstance. To keep assets from going directly to stepchildren on your death, you can set up a trust and name your spouse as the trustee. If you do this, however, your spouse will decide where assets go, so they may still go to stepchildren. To keep this from happening, you can name someone else as a trustee and instruct them not to benefit stepchildren.

Trusts also have the benefit of privacy. If you die leaving only a will, your estate will go through probate, a public process. This means everyone, including children, will know the size of your estate and who gets what. Trusts can be administered in private, so no one will know the details except the trustee you name. This can reduce conflicts among heirs.

A Life Estate

A life estate is another tool you can use. This document allows a spouse to remain in a family home for life, after which the property goes into the trust. You might also employ a post-nuptial agreement. This can prevent spouses from gaining ownership of assets so they can’t pass them to your stepchildren.

What About Life Insurance?

Life insurance can play a role as well. You can purchase policies naming your children as beneficiaries so they get cash benefits when you die no matter what happens to other assets in your estate. Doing likewise for stepchildren can keep them from feeling neglected although you have blocked their access to other estate assets.

The Bottom Line

how to protect assets from stepchildren

You can prevent stepchildren from getting assets from your estate after you die by using your will, trusts and other estate planning tools and techniques. This can help avoid conflicts and potential litigation from children upset because stepchildren received assets from the estate. If you don’t take action, however, stepchildren can still benefit even at the expense of your children if, for example, you die before your spouse, who then names their children as beneficiaries of the estate.

Tips for Estate Planning

  • Estate planning can get complicated as you try to ensure that your wishes for distributing your assets, benefiting charities and providing for children or others. A financial advisor can help you think through your objectives and come up with strategies to achieve them. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you have a large estate, you will likely want to consider the potential impact of inheritance taxes. Federal estate taxes can be as high as 40% on amounts over the annually adjusted estate size benchmark, which for 2023 is $12.92 million. Six states also levy their own estate taxes. Estate planners know ways to reduce or avoid these taxes, using strategies such as charitable gifting to keep your estate below the tax threshold.

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