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March 1, 2005 > Estate Planning Conflicts with Children of Prior Marriages

Estate Planning Conflicts with Children of Prior Marriages

Q: My wife and I both have adult children from prior marriages? How do we deal with this in our Will?

A: Very careful planning is necessary to avoid family conflicts and to avoid lawsuits for the estate.

Aside from divorce, the most frequent source of bitter family conflict is distribution of assets of a deceased parent. A primary goal of estate planning with your lawyer should be structuring the Will and Living Trust to avoid conflicts. If conflicts occur, they not only tear the families apart, but they often result in costly, time-consuming lawsuits. Sometimes, as with divorces, what drives the lawsuit is not money - it is jealousy, rage, revenge, guilt or other emotions that remained in check while both parents were alive.

Conflicts arise readily enough when everyone is from the same family. Add the disconnect in relations by prior marriages, and the mix can be explosive If husband and wife each have children from prior marriages, the estate plan faces major issues, including:

  1. A fair distribution of the assets to the children,
  2. Avoidance of conflicts among the children, and
  3. Avoidance of conflict between the surviving spouse and the children from the prior marriage.

One spouse usually lives longer than the other. Rarely do both die at the same time. So you must take that into account when deciding what happens with the assets upon the first death. The surviving spouse is left with potential conflict with the children from the prior marriage. These children may claim that the surviving spouse is taking or wasting assets that rightfully should be theirs.

To avoid lawsuits, and in an attempt to keep peace within the families, very careful planning is necessary. The amount of money in the estate does not seem to affect conflict. Bitter battles have been fought over grandma's salt shakers. Again, family emotions often drive the disputes. The range of plans to avoid conflict is almost unlimited. You and your attorney need to be creative as well as careful. There is no "one size fits all," but let's discuss some approaches.

Assume that husband and wife are each 70 years of age. According to official Life Expectancy Tables, the wife has 16 more years to go, while the husband has 13. They each have three adult children and grandchildren from prior marriages. They each have separate property accumulated before their marriage and community property accumulated since their marriage. They have no children together. The wife does not get along with the husband's children, but the husband wants his children to get their fair share. If the husband gives everything to the wife upon his death, the stage is set for conflict between wife and husband's children.

One solution is for husband to put in his Will and Living Trust that his separate property and his one-half share of community property goes to his children. The wife receives nothing from the husband. Wife keeps only her one-half share of community property and her separate property. If the couple is wealthy, this plan is not a problem. The wife does not need the deceased husband's assets.

On the other hand, if the couple is not wealthy, the entire estate may be needed to support the wife in years to come. What if she lives another 20 more years - and with a new boyfriend to boot? The husband's assets could be left in trust for the wife to use as necessary. If there is any left upon her death, these assets go to his children, while her assets go to her children.

This still leaves potential for conflict with the children of the prior marriage. They may argue that the surviving wife (or the new boyfriend) is spending too much of "their inheritance."

THE LESSON: There is no easy answer to estate planning with Wills and Living Trusts. Each family must discuss with their attorney a plan that meets their goals. But even the most carefully drawn plan is no guarantee that there will be "Peace in the Valley."
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