Speaker: Maritess Bott
Maritess:
Yes, remarriage and estate planning can be very tricky.
Thank you for watching our blog or watching our video today. I’m Maritess Bott from Bott & Associates.
Our topic is remarriage. Why is that important? I bring it up, and people sometimes get a little bit confused or surprised to think about this topic because when you’re doing an estate plan, especially in your early years when you have maybe some young kids and you’re still getting used to having this family, it’s hard to think through if you pass away first and then your husband now has to raise children. But then, what if your husband—surviving spouse—gets remarried? And what happens to the funds? What if that money that you’ve worked hard—together with your husband—accidentally benefits this new spouse as opposed to your kids, which is what you and your spouse typically are hoping for, and hoping to keep it within the bloodline or the family?
I always say, let’s make sure that there are remarriage provisions within the document. What does that mean? It just means that before the surviving spouse gets married again, they would have to have a prenup. We would make sure we solidify that this money you’ve worked hard for as a couple is going to go to the kids rather than to a new marriage.
I’ve seen it play out in so many different ways. Most of the time, you’ll see in litigation—when it comes to estates, probate, or trust litigation—most of the fact patterns include a surviving spouse and children from previous marriages. As you can understand, it’s fraught with challenges because the surviving spouse thinks, “It’s my money, I get everything,” and doesn’t want to give anything. And the children from a previous marriage think, “Wait a second, Dad said we were going to get part of this estate, and now everything’s going to you? And then when you die, it’s going to go to your kids, and we get nothing from Dad?”
If you can imagine, that’s a really challenging, friction-ridden kind of predicament. If we already put it in the trust that says, if the surviving spouse wants to get married again, that’s fine, but a prenup is required, and the money is always going to be in the trust. Obviously, the surviving spouse will use the money as needed, but if something happens to that surviving spouse—whether it’s five years from the first death or twenty years from the first death—when he or she dies, that money will go automatically to the children from the previous marriage.
Or we could do a combination, where some of it goes to the new spouse and some goes to the children from the previous marriage. It really depends. I always look at what stage they’re at in their lives.
If two people are coming in with children of their own and assets of their own, and they just want to benefit each side of the family, then we’ll make sure the estate plan clearly states that. On the other hand, if they come in and they’re married for another twenty or thirty years, the surviving spouse might say, “He or she’s been with me all that time, so I’m going to make sure that some of it goes to my children, but some of it does go to my second surviving spouse.”
That’s where it gets tricky. It’s a lot of conversation. It’s absolutely not cookie-cutter. When you say, “I’m going to just do my own estate plan, I’ll just find a will online”—this is absolutely something you want to talk to a professional about because there are so many nuances, so many updates, and so many ways to strategize how your actual wishes can be reflected within the document.
I’ll give you two examples. They’re just different.
I have one example of a married couple who came to me years ago. It was two people already in a blended family. The husband had children from a previous relationship; the wife had no children. The wife had a good amount of money, and she wanted to make sure that she benefited her husband, but at the end of the day, she wanted this money to go to her twelve charities, which is awesome.
She passed away first. He is still living. Her trust says he is entitled to some money every single year—actually, every single month—but when all is said and done, when he’s passed, this money is going to keep growing and go to her twelve charities. He’s still the trustee, but the money is growing nicely. He gets a nice amount every month, and this money—which might be about a million, a million and a half dollars—is going to benefit the charities that she was involved in and really passionate about. Her husband is fine with it. He’s glad to take some extra funds because he has his own money, and his estate will go to his children, and her estate will go to her charities.
To me, it’s a win-win-win. Everybody’s getting whatever they’re getting, and the charities will eventually get this money.
Second story is another married couple. The wife has one child; the husband has no children. The wife had already been diagnosed with a terminal illness, and she really wanted to make sure that her money was going to her daughter. It turns out her daughter has a little challenge with some of her life decisions, so she didn’t want the daughter to get 100% immediately. But she wanted to benefit her husband too.
Sadly, she did pass a couple of years ago. The husband is giving a little bit to the daughter, just as his wife wanted. Eventually, the daughter will get more when he dies. He’s fairly young—he’s going to live his life. The daughter gets a little bit upon the mother’s death, and then she gets more upon the second death.
Recently, the husband came in to meet with me and said he’s dating someone. Great—no problem. Everyone has to move on with their lives. I explained to him, “This is what the trust says. Here’s what your deceased spouse wanted.” He understood that. We talked about the ramifications of this new relationship. We’re trying to protect his deceased wife’s wishes and the money for the daughter, but also let him move on with his life and be able to use the funds they worked together to create.
My point in that is, now we at least have a framework to work with. We’re going to follow the deceased spouse’s wishes as much as possible and also allow him to move on with his life and use the funds.
Those are two examples of how, if we can plan these things early on and have some framework of, “Here’s my wish” and “Here’s my wish”—do they match? Do we want the same things?—then at the end of the day, if we don’t do this planning and have things lined up, it could accidentally go to a brand-new person you don’t even know. Some person meets your husband and ends up benefiting from your hard work, going to her family, her relatives, and her children.
Most of the time, that’s a stomach-hurting thought that people have. I prefer to have as much instruction as possible so I can follow both of your wishes and desires and have that win-win situation.
Remarriage is a really important topic, really important to discuss—whether brand new in a marriage, in the middle of a marriage, or even at the time when you have two families coming together. Let’s talk about it more and figure out what that looks like, so we can follow all of your wishes and instructions to the extent possible.
Hopefully, that gives you a little information.
I’m Maritess Bott. Thank you again for listening to our podcast or watching our podcast, and we hope to see you next time. Have a great day!
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