On June 28, 2013

Inheritances in today’s world of 1st, 2nd and 3rd marriages “family” things can get complex. In all states (except Louisiana), children do not have any inherent “rights” to an inheritance. You can leave your money and assets to anyone you want, and can eliminate anyone you want. Only if you fail to clearly state your intent via an appropriate legal document (usually a Will or a Living Trust), will natural heirs obtain “rights” to inherit. This is usually referred to as the laws of intestate (i.e. no valid will) distribution.

If the family is a “blended” family (i.e. children of previous relationships involved) it can cause significant issues when it comes to determining where assets go after death. However, once you decide how the assets should be ultimately distributed, it is crucial to understand how wills and trusts work, how non-probate transfers work, how personal property is treated and how real estate is titled. All of these will determine whether or not your wished are actually carried out or if you get unexpected results.

Here are a couple of common scenarios that we hear. Dad found a new significant other and they got married. Dad told us that we were provided for in his Will. After a while, the family house that he lived in did not work for the new couple so they sold it and bought a new place. Dad didn’t realize the implications that new house was titled joint tenancy. He is sure that his new wife will do the right thing for his kids. Fast forward several years and now dad has just passed. Step mom and him had a great time early but lately things have been less than rosy. Because of the legal titling and totally irrespective of what is in Dad’s will, the new house is now totally hers. This is a classic non-probate transfer that happens upon death and leaves your kids with nothing.

Next scenario – Mom married the new guy and things went bad after a few years but she just moved out of his place and never got around to getting a divorce from him. Mom also kept putting off getting her estate plan done as she thought she had plenty of time to get around to this. She figured all that was hers would go to her kids anyway since the new guy didn’t have any. Mom passes and new dad informs the kids that he is taking her house and her things because as the spouse he is entitled to them. Because mom didn’t divorce him and didn’t do a will the kids don’t get anything including family treasures that are generations old. Her lack of getting around to it disinherited her kids.

The overriding moral is “Take the time and spend the money to get your planning done right”. Proper planning will put you and your family at ease now and save time, money and heartache after you are gone.

Categories: Inheritances

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