In the first article of this series, we discussed the legal implications of remarriage and how it may have a detrimental effect on biological children from a first marriage. We introduced you to Jane and Harry, each in their second marriage, and their mixed family of six children. Let us continue our story: Jane entered into her new engagement with a sizable money account left by her late father. Jane had investments, many retirement funds, and two residences. Harry did not own real estate and ran a tiny printing firm with certain risks and monthly debt.
Jane and Harry are soulmates who have everything in common. Jane trusts Harry to care for her three biological children, and Harry trusts Jane to care for his three children. Yet, these six children are legally distinct. Suppose Harry or Jane died without an estate plan (technically known as dying “intestate” or without a will). In that case, Harry’s biological children might inherit legally from Harry but not directly from Jane. The same is true for Jane’s children; since they are not her direct descendants, Harry’s children could not inherit now from Jane.
Nevertheless, if Jane had left everything to Harry, her fortune would not have been divided among her three children, Joe, Mary, and Tony. Jane’s money would be under Harry’s hands, and Jane’s children would be essentially disinherited. Harry might then pass on Jane’s estate to his three children, preventing Joe, Mary, and Tony’s inheritance rights. Worse, Harry’s business creditors may be able to recover their debts using Jane’s assets.
Returning to Jane and her biological children, Joe, Mary, and Tony, let us expand our facts. When Jane dies suddenly, Joe, Mary, and Tony are small children. Jane and Harry had made wills early in their marriage, giving everything to one another. Jane and Harry were certain that their blended family would succeed; Jane had no reservations about Pad’s commitment to caring for Jane’s children and felt he would be a good steward of her father’s money. Jane, unfortunately, was incorrect. Harry received all of Jane’s assets and had no legal duty to care for her children since he had never properly adopted them. Joe, Mary, and Tony returned to live with their natural father and his family, and Harry now controlled Jane’s riches, cutting her three children off from the wealth of Jane’s family.
Indeed, this was not the intention of Jane’s father when he passed his assets to her. He had no relationship with Harry or Harry’s children, yet they inherited his fortune when Jane died. How might this outcome have occurred? That is not fair, and it is not the desired outcome, but it is a legal conclusion that may occur if Jane does not include these issues in her estate plan.
Even though this scenario is not precisely like your family’s situation, mishandled inheritance might have unintended consequences; everyone has a story or has heard a story of how money, property, and asset ownership within families may disappear swiftly, frequently as a consequence of divorce, death, mismanagement, and a lack of preparedness. Is it possible to avoid these unforeseen consequences? Absolutely!
Establishing a trust-based estate plan and keeping beneficiary designations up to date are the most effective ways to safeguard children against disinheritance. A trust allows you to devise and specify a strategy for the future distribution, management, control, and use of your funds. You may choose trustworthy persons or experts to carry out your intentions and govern your estate however you like. Your money remains in your biological family tree, and your heirs get what you want them to have. Nothing is left to chance, confusion, or impropriety. Our future blog will discuss how this will operate.
As usual, the Paducah Family Lawyers Company is here to assist you in determining the best options for your family’s estate planning requirements. Let us serve you so that your family is always safe.
