It is helpful for just about everyone to prepare for their death by drafting either a Will or Trust. However, this is especially true when one or both spouses have children from a prior relationship. Failing to properly prepare in this circumstance can lead to significant expense and aggravation for your surviving family members.
When a person dies without a having a Will, state law governs who will receive their assets and in what percentage. This is called Intestacy. The intestacy statues vary from state to state, and the percentages a surviving spouse inherits depends on those statutes. It is NOT a guarantee that the surviving spouse will received all of the deceased’s assets, nor it is a guarantee that the deceased’s children from a prior marriage will receive anything at all. Beneficiary designations of assets and titling of assets on deeds and other documents can override a will and a trust. This can lead to a result quite different from what the decedent would have wanted. It can also lead to a very challenging situation where the surviving spouse is suddenly co-owning real estate or other property with their spouse’s children from a previous marriage. It is often very difficult – and expensive – to agree upon the value of the inherited property and decide who will own what property in this situation.
Even if a person with children from a previous marriage does plan ahead and drafts a Will, there are potential complications to be aware of. Some people opt to leave all their assets to their spouse, and then trust the surviving spouse will bequeath all their assets to both their children and step-children. With a simple Will, there is nothing preventing the surviving spouse from later disinheriting the deceased spouse’s other children. It is often necessary to draft a Family Trust to provide for all of the person’s children, as well as the surviving spouse.
There are many different ways to address these potential problems – many of them relatively simple and inexpensive – but some amount of planning must be done before it is too late. A good estate planning attorney will help navigate these issues including the titling of assets and the naming of beneficiaries.