2nd Marriages and Unintentionally Disinheriting Family Members
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Risk of One Spouse’s Side of the Family Being Unintentionally Disinherited
In the previous newsletter in this series, we discussed how probate avoidance methods can cause you to accidentally fully or partially disinherit family members.
In this newsletter we expand on this topic by showing how lack of careful planning in second marriages can risk one spouse’s side of the family being unintentionally disinherited.
Very often we have clients in second marriages come to our office with Joint Assets, Wills and Retirement Accounts that leave everything to each other and then to his/her own respective children. The following example illustrates:
Example 1:
John and Sally are married for the second time. John’s Will and IRA leaves everything to Sally, if living, otherwise to John’s 3 children. Sally’s Will and IRA leaves everything to John, if living, otherwise to Sally’s 2 children. John and Sally own a joint savings account with $50,000 and have a joint brokerage account with $250,000.
In the above example, if John dies first, Sally will inherit John’s life savings from his Will, IRA, and Joint accounts. When Sally later dies, her children inherit everything from her Will and IRA. John’s children do not inherit anything.
If Sally dies first, John will inherit Sally’s life savings from her Will, IRA, and Joint accounts. When John later dies, his children inherit everything from his Will and IRA. Sally’s children do not inherit anything.
As a result, one set of children is unintentionally disinherited depending on which spouse dies first.
Leave to Both Sides of the Family in Both Wills and Both Retirement Accounts
One solution is for John and Sally to leave everything to all the children in both of their Wills and to list all children as contingent beneficiaries on financial accounts. The following example illustrates:
Example 2:
John’s Will and IRA leaves everything to Sally, if living, otherwise ½ to John’s 3 children and ½ to Sally’s 2 children. Sally’s Will and IRA leaves everything to John, if living, otherwise ½ to John’s 3 children and ½ to Sally’s 2 children.
In Example 2, it doesn’t matter who dies first. All the children will inherit on the death of the 2nd spouse.
However, Example 2 relies on the surviving spouse never changing his/her Will and IRA beneficiaries.
Risk: Surviving Spouse Can Later Disinherit Deceased Spouse’s Family.
After John’s death, Sally might remarry again. Sally might no longer have a close relationship with John’s children. Sally might decide that she would rather leave everything to her new spouse or to her own children and leave nothing to John’s children.
Use of Trusts
The next edition of the Koldin Law Center E-Newsletter will begin a series on the use of Trusts, including providing for your spouse while making sure your own children do not unintentionally lose their inheritance.
For a complete discussion of Trust planning, see our website by clicking here.
For more information about a Last Will and Testament, please visit our website by clicking here.
How We Can Help
The Koldin Law Center, P.C., located in East Syracuse, New York, has over 50 years of experience helping individuals and families navigate elder law, estate planning, and Medicaid planning.
Our practice is limited exclusively to Elder Law, including:
- Medicaid planning and applications
- Asset protection strategies
- Wills, Powers of Attorney, and Health Care Proxies
- Revocable and Irrevocable Trust planning
When we handle a Medicaid case, we do more than submit the application—we review strategies to protect assets both before and after Medicaid eligibility is established.
We offer no-fee initial consultations, and we welcome the participation of adult children, attorneys, accountants, and financial advisors.
There is something you can do.
We are here to help.
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We appreciate your referrals
We have been told by many clients who are in a crisis that they wish they had known about our firm much sooner. We are proud of the many families we have helped in times of crisis.
We are also proud of the many families we helped avoid financial crisis by doing estate planning in advance.
We all share the responsibility for making our family and friends aware of the planning options available to them.
Your referral to the Koldin Law Center could make a major difference in the lives of your family and friends if they are someday faced with a long term illness.
Remember that the Koldin Law Center offers many services for clients of all ages. Our services range from basic estate planning such as a simple will to complex estate planning including asset preservation planning.
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