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Estate Planning Questions and Stepkids

Stepdad100's picture

Question about My Estate and my Will

The Situation

I have 2 kids, my first wife is deceased. I am remarried to a woman with 2 kids. We are re-doing our wills.
Her kids do not live with us because of serious behavioral issues - they live with their Dad.

If something were to happen to me I want to make sure my second wife is taken care of and my 2 kids are taken care of.

If I die and then a day, a month, a year....or years later she dies...I want to make sure her kids don’t get any money from my estate. Has anyone else been in this situation.

Am I a bad person because I want my estate and money to go to my wife and kids and not hers. After all they will get their Dad’s estate when he dies.

My attorney suggests designating my kids as my beneficiary on certain accounts - so in the event something does happen it goes to my 2 kids. I was told that designated beneficiaries overrule the will.

Any suggestions would be appreciated.

Iamwoman's picture

If you die first and your wife gets the estate, there is no way you can control who she then wills it to when she dies.
I would just make sure my two kids are taken care of, and anything left goes to the spouse. Your spouse is a grown person capable of employment and most likely with skills.

A grown up is capable of caring for themselves, a child is not. My mother always told me that the money should go to the people you love who need it the most.

Peridwen's picture

First: consult an estate lawyer (I’m not sure if that’s the actual title, but a lawyer who specializes in wills/trusts). Then you can have all your assists locked up in a trust that goes to your kids, but with survivorship rights to your wife. Your wife would be able to use the funds and assets as long as she lived, but she would not be able to will those assets to her own kids. Her death would negate the survivorship and all assets would revert to your kids.

Now that’s not to say your wife couldn’t bleed it dry and leave your kids with nothing but physical assets like the house etc, but that’s why you need the lawyer, to figure out the right kind of trust.

Of course this also depends on your ages and the ages of your kids. My previous recommendation is based on the idea that your kids are grown or nearly grown. If your kids are young, they will need looking after if you die early. If your wife would not be their guardian in the event of your death, leave your wife enough to handle arrangements and take care of her for a few months. The rest should go into a fund for your kids needs, accessible by their legal guardian via an impartial third party. (The lawyer who draws up the agreement is usually a good choice.) the guardian can draw whatever is needed from the fund, but would have to ask the lawyer for permission. This is an attempt to protect the children from their guardian stealing your estate and not spending it on the kids.

Kes's picture

You can indeed put some money in trust to only go to your children and not to your wife. We redid our wills a few months ago (in the UK) and chose to have all the money go to the other spouse apart from a section of my husband's money that he has earmarked to go to his daughters. I think this is fair - he worked like a slave for years for that money, and if he wants to leave it to them I have no objection.

All the rest of our money we are pooling and the survivor will leave instruction for it to be divided equally four ways - to my 2 daughters and his 2.

You are certainly not a bad person to want to do what you are proposing.

notarelative's picture

"...My attorney suggests designating my kids as my beneficiary on certain accounts - so in the event something does happen it goes to my 2 kids. I was told that designated beneficiaries overrule the will..."

If you have a 401k or IRA this may or not be true. A 401k is covered by federal rules. Federal rule is that the spouse inherits it unless the spouse has signed off no matter who is listed. An IRA is covered by state rules so you need to check the rules of the place where you live.

Some attorneys are better at estate planning than others. Interview a few before you decide whom to use.

futurobrillante99's picture

I recommend the following:

Make sure your wife has enough money from an insurance policy to bury you and help pay your share of the bills until retirement, then make sure the rest of your wealth goes into a spendthrift trust. That means that she cannot touch the principle, but will receive a check each month to help support her. When she passes away, anything left in the account goes to your kids.

I would also recommend you get a post nuptial agreement that outlines what each of you brought to the marriage and have your will reference it so there are no disputes.

I have done both, but my stepsons are listed in my will ONLY if my husband dies before me because his estate will be given to me in full. I wanted to pass on a portion of what he might leave me to his kids when I die. I didn't think it was fair for my kids to get part of my DH's assets.

steponmeagain's picture

What I did to make sure that it was somewhat fair was made my wife 3/4 of my estate and our daughter 1/4. From that, I would assume that she would split 50/50 with our daughter and SS when she goes.

mro's picture

Of course you're not a bad person for leaving your assets to your kids. I assume your wife is doing the same with her assets. My DH and I went into our marriage with the mutual understanding that all my assets go to my kids and all of his go to his kids (all adults). We have done this by keeping all our assets separate, having POD/TOD designations where possible, and with our wills to clean up whatever's left. I would never assume a surviving spouse would distribute assets fairly. Too much left to chance there. What if the surviving spouse becomes incapacitated and a POA or guardianship ensues and a third party becomes responsible for making those decisions? He or she would likely throw the agreement out the window and distribute assets according to the law (to the surviving spouse's heirs only), or in the best interest of the surviving spouse's family, leaving out the heirs of the deceased spouse. What if the spouse remarries and the new spouse gets hold of the assets?

Good point above though about the IRAs. Ill have to check into that.

lorlors's picture

My skids will inherit the house that DH paid for that BM lives in. A $1.6 million dollar house with a pool in Sydney might I add. Because they will inherit this, which was always DH's intention, we have specifically excluded the skids from our wills. If we have children together, they will inherit the lot from DH and my marriage. If we have no children, it will all go to my sister's son.

Might sound mean to some but I owe the skids not one single red cent. If we didn't exclude them from our wills, they would effectively be inheriting twice.

Loxy's picture

I’m not sure what country you live in but in Australia your situation could be resolved by placing your assets in a trust. If your assets (like your house) sit in the trust then you can specify that your wife can live there up until her death and then it passes to your children. Her children will have no legal access to any assets you place in a trust.

Loxy's picture

I’ve been with my DH for a decade now and I’m ashamed to say we don’t have a will – it is on the ‘to do list’ for this year. One of the reasons we don’t is because it all seems so complicated.

I would also love some advice on how to approach it, my situation is below.
• SM for 10 years to two skids – SD13 and SS11
• BM is a high income earner and has more assets than we do so skids will get a decent pay day from their mother.
• Had significant fertility issues but finally having my first (and will be only) child in June this year.
• I love my SS11 and can’t stand my SD13.

I would be happy to leave some of my share of assets to SS11 but don’t want to leave any to SD13 and obviously can’t differentiate between the two – DH would never allow it.

I am also not comfortable leaving my share of the assets to DH if I die first as I believe he would then split whatever is left between his three kids equally upon his death which would significantly disadvantage our bio son given what the skids will get from BM.

I personally feel like my financial contribution to the skids is what I’m doing in the here and now – ie the last decade and the next to come. I have raised them (shared custody) since they were in nappies. I’ve contributed to every cost they incur and will continue to do so until they are adults. I feel strongly this is enough given it’s worsened my own financial future as a direct result of having to raise someone else's kids.

I also don’t want to disadvantage my bio son in any way given the skids will get a big cheque from their mum upon her death.

So is it wrong to suggest to my DH that my half share goes to our bio son and his half share should be split equally three ways between his kids? And that we put it all in trusts so that neither side can alter the other’s intentions no matter who dies first.

strugglingSM's picture

DH and I don't have any children, but I told him that if we did, I would expect things to be split up in the way you mentioned - my half, exclusively to our child(ren), his half split equally among SSs and our child(ren). My SSs have their mother who is also providing for them and any children we have will only have DH and me. Also, DH had no assets when he met me, so anything we have, we've built together.

SAFjh's picture

No Loxy...there is no such thing as a wrong suggestion here. In my estimation your DH should have no problem with this either but if there is a disagreement you have very excellent reasons for wanting things the way you do.

Acratopotes's picture

It is very easy , there's a trust fund and the beneficiaries will be your wife and bio children, thus if she should pass her kids can't get anything from the trust fund, they are not beneficiaries and she can't do anything about it in her will.

SAFjh's picture

I am glad to see this topic get raised. I have always had mixed feelings about what I will do with my assets and money when I go. I have no children and would love to leave everything to my SO should I go before her but literally can't stand the idea that her kids might get any piece of it or benefit from it in any way. I know I will not be a beneficiary of anything she has because her kids will get it so maybe I just won't name her the beneficiary but then I really don't know who to leave everything to if that's what I decide. I have wondered too if I am heartless or selfish for feeling this way but it doesn't appear that others would say I am. In a small way I am hurt that my SO won't name me as a beneficiary because of the years I have stood by her side and helped financially to raise two kids that aren't mine. I don't and won't need her money as I work for my living and am saving my own money as well but just on principal I am a little pained by this.

To the OP...I don't think your a bad person in any way for not wanting to see another person kids gain what you probably worked hard to accrue over a lifetime. You are entitled to feel any way that you feel. You have received sound advice on how to proceed and now I know what my options are too so thank you for bringing this topic to the board!

Unfortunately, I have seen firsthand how death and inheritance can bring out the greed in people. Hopefully your wife would not do as one poster suggested and bleed the trust dry if that is the way you choose to proceed.