Estate Planning with Children From Previous Marriages

In this day and age, people change their spouses like they change their clothes. Sometimes, people will even have children

from previous marriages. It’s certainly not unheard of, but how do you go about leaving assets to another spouse to help care for children from a previous marriage? That’s the big question we’ll strive to answer right now.

If things worked out like they do in the movies, leaving assets to children from a previous spouse would be as simple as snapping your fingers. You could just leave the entire balance to your children through use of a Will. Unfortunately, real life isn’t anything like the movies, and your spouse might decide to disinherit any step-children by changing his or her Will. Let’s see an example:

Say you and your spouse are married and have three children. Your spouse dies suddenly, and you get remarried to

someone with whom you set up what’s known as a reciprocal will—that leaves all of your assets to each other, or to your children. Your spouse again dies and you then inherit all their property. Time moves on and then you meet someone else who has two children all their own. Your new spouse moves into the house that you inherited from your old one, but the children from your previous marriage don’t get along with the children your new spouse brought into the relationship. Your new spouse then convinces you to change your will to leave everything to them and their children, and then they outlive you and inherit all the assets your previous spouse left you.

The point we’re trying to make here is that a reciprocal Will has many risks that may cause you to intentionally disinherit your children. However, there is a pretty easy solution to the problem! In the example above, your first spouse could have let his or her assets pass into a revocable trust that is funded during his or her lifetime, through the Will, or through beneficiary designations, or any combination of these. Your spouse can then amend or revoke the trust at any time, so they aren’t locked into anything. Upon their death, the trust would then become irrevocable and continue on for the benefit of you and the children. The trustee would also be able to invest the assets to create income and pay all of it to you while keeping the principal for your children. At your death, principal that remains in the trust would go to your children outright or in further trust.

All in all, it’s quite complicated and a lot to wrap your mind around. If you have any questions about estate planning and leaving things to children from previous marriages, we can help! Come talk with us at Scott Counsel today!

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