Speaker: Maritess Bott
[Music]Maritess:
Actually, that’s a great question. A lot of times we are talking to a husband and wife, and they have children—maybe joint children—and it’s often a question of, “What if I pass away, but then my husband meets someone new? What happens then? Will my children or our children be protected?” That’s a really important question because right now we have lots of blended families. There are a lot of families that are blending due to divorce or, obviously, upon a death.
It’s okay for them to be happy, but there are usually some things you have to plan a little differently when you do have a blended family. Somebody has sort of a Brady Bunch situation—I come in with three kids, husband comes in with three kids—let’s make sure that it’s going to the right people upon the death of one or upon the death of the second. Unfortunately, it’s actually the most litigated issue in trust administration or even in probate. What I mean by that is that often the people who are out there trying to exert their rights are the second spouse versus children from the previous marriage. Perhaps the children from the previous marriage are a little frantic because, “Wait a second, Dad told us that we were getting something,” and then all of a sudden they’re not. The surviving spouse is basically saying, “No, I was supposed to get everything.” It’s hard to tell whether Dad’s intentions were truly fulfilled.
I say that because yes, you can give your estate to anyone you want. However, if perhaps the second spouse highly encourages you, or through undue influence forces you to go to an estate planning attorney and sign something over, and all of a sudden the second spouse receives the funds as opposed to the children from a previous marriage—which is what maybe the decedent really wanted to happen—that becomes an issue.
According to one study, after 25 months—that’s only about two years—61% of men actually remarry. For women, it’s much lower. Most of my female clients are like, “I’ll never do that again.” Still, about 19% of women remarry by the 25th month, about two years after the death of the first spouse. So how do we handle that? What do we do? Before I go into some of the recommendations, I want to share a few stories because I think stories drive the point home.
The first one I call the “Grocery Store Rendezvous.” I had clients—a husband and wife—I did their estate plan about 15 or 16 years ago. Everything was going to go to their three sons, very straightforward. The wife dies unexpectedly, maybe two or three years after our initial estate planning meeting. The husband is now in his late 80s or early 90s, and he meets someone at the grocery store. She’s in her 50s, and they start talking. She starts coming over, making dinner for him on a routine basis, and she had young children of her own.
How did I even know about this? The three sons were concerned, and you might think, “Why should they be so concerned? He’s a grown man.” But the sons were worried about someone like this woman swooping in to try to encourage funds going to her or pushing to get married. It was a tough situation as an estate planning attorney because I needed to stay out of the family dynamics, but I did call to check on my client. He was happy to tell me about the woman and said he was mad that his kids were questioning his intentions. He said, “This is my life, and I should be able to do whatever I want,” which is true.
Fast forward a year later—I left it alone, and when I reconnected with him, he was fine. He still had his mental capacity, and he was a smart man who had accumulated about $3 million. He told me, “Oh yeah, we just spent some time together, but now it’s done.” He was fine, and he enjoyed the time he spent with her. He was smart enough to know better and mentally capable of understanding. I don’t know if the sons had any influence, but in my world that was a tragedy diverted. By age 94, he had passed away, and everything went to the three sons. That’s one story I think is a good one.
The second story I’m going to share is the “I Did Not Fund My Trust Properly” story. A woman lived in Tennessee and had property there. She met a gentleman, wanted to get married, sold her home in Tennessee because they were moving to Texas, and created a will and trust in Tennessee, putting her house in the trust. She sold it, took the proceeds, and bought a new home in Texas with her new husband—brand new husband. She just put her name on it, not thinking that she should have put it in a trust. Sadly, she died shortly after moving to Texas.
This woman had two children from a previous marriage, and that’s what the will originally said—everything to the children from the previous marriage. However, when she died, the property was in her name alone, and she now had a new husband of less than a year. The house had to be split up. It went into litigation in Texas. He lived in the house for about five years, and the children from the previous marriage had to deal with him that whole time. Eventually, he also passed, and the money got to all of them. The moral of the story is that if she had put the house in the trust, perhaps the husband wouldn’t have received anything, and his children wouldn’t have received his portion upon his death. It’s really important to not only create a trust but actually title everything in it so everything goes the right way.
Story number three is something fairly recent. I call it the “Two Cents Story.” I had a woman call us—she was a grandchild of a decedent. Her grandfather had passed away in his late 80s. Grandma had passed maybe two years earlier and had been sick for a long time. She had a very good caregiver who took care of her while she was dying and lived in the home. Shortly after Grandma’s death, Grandpa and the caregiver started a relationship. All of a sudden, they were married. Then the granddaughter told me that they were forbidden to see their grandfather. They barely saw him in the last year and a half before his death.
Upon his death, she received paperwork from a lawyer that said, “I am giving two cents to each of my grandchildren because they didn’t give two cents about me.” My client was crying because she truly loved her grandparents—they helped raise her. The caregiver was in her 50s; the decedent was in his 80s. Did they love each other? Did they have a beautiful marriage? We don’t know. The granddaughter didn’t know much about her. Did they sign some paperwork without him really understanding? Possibly. But it would be a long battle to prove he wasn’t of sound mind. It’s crazy how easy it can be for someone to come in, say “I love you,” and change everything. With a 30–40-year age gap, the rest of the family can end up completely out of the picture, and the new family gets all the assets because when she dies, it goes to her family. That’s another sad story.
The last story I’m going to share is about a person I loved—an incredible businessman. He came from Germany and built an amazing business creating reflectors for bicycles and construction workers. He was single but started becoming forgetful. He lived in a townhouse, and his son started to worry because he would wander, leave the oven on, or need police to check on him. He only had one son. The son said, “Dad, we need to do something.” The business was being managed by others, but the father was still the majority owner. The son moved him to a senior facility, somewhat independent/assisted living.
Shortly thereafter, a woman two doors down started spending time with him. Within a few months she said, “Let’s move in together.” It was fast. Sadly, we had to start a guardianship proceeding before anything bad happened. She tried to get them married—wanted to go to Mexico to do it. Granted, he wasn’t in the best frame of mind, but he enjoyed the attention. Luckily, the court proceeding prevailed. It took about six months, but eventually the son was appointed the legal guardian, and his father was not allowed to get married or make those decisions because he wasn’t of sound mind. A month later, the woman was no longer interested and moved out of the facility. It’s sad how easy it is to take advantage of people who aren’t fully cognizant. If no one is looking out for them, it’s easy for someone to manipulate the situation.
Those are the stories. I know it’s a lot. Many people tell me, “Oh, my wife will never remarry,” or “My husband would never remarry.” I tell them these stories and the statistics, and then they think, “Uh oh, maybe I should think about it.” So, what’s the solution? The solution is to get your plan in place—get something written down, preferably a living trust with remarriage provisions and prenuptial requirements for any surviving spouse. Those are two things I highly recommend in every document. It doesn’t matter if you trust your husband 100%, whatever you think—just put it in, just in case.
To add a little extra protection, I also recommend adding a co-trustee with the surviving spouse. If you have an adult child you trust, let them be co-trustee upon the death of one spouse. What does that entail? It doesn’t mean they have to be in their parent’s business 24/7. It just means that any time there are changes to the trust, or big changes like selling a house or opening a new account, the child would have to be involved in that decision. So if the surviving spouse meets someone new and starts putting people’s names on things or spending lots of cash uncontrollably, that co-trustee can step in and say, “Hey, what are you doing?”
They would be more of an overseer—not necessarily involved in daily finances, though they can do that later if the person loses capacity. The moral of this long story is: get your documents done, and get them done immediately. Continue to review and update them. We want to make sure everything is in the trust and that your wishes are updated. If things change in five or ten years, update it.
I’m not against people remarrying because obviously it’s also for companionship and love and all sorts of things. I’m more of a cynic in the sense that, because of what I do, I just want to make sure the person who earned this money or owns the assets has their wishes properly listed and documented, making sure the family is protected. That’s usually just my role—let them get married, but let’s protect the money.
Hopefully that answers the question for all of you, and of course, give us a call if you ever have any other questions with respect to this topic. Thank you.
