Thursday, December 19, 2013

Leaving inheritances to children can be a touchy topic in blended families.

Estate Planning can be tricky especially when step children and half siblings are involved.  There is an inherent tension between wanting to keep your new spouse happy and wanting to take care of your own children. This following scenario is not an uncommon situation I hear often in my practice and in this instance, the spouse won.

SCENARIO: My father died 10 years ago, leaving a trust worth more than $1 million. He acquired his assets before marrying his 2nd wife.  When creating the trust, he put his property in joint ownership and after he died, his wife removed us from the trust. When she died a few years later, she left everything to the son they had together and her daughter (my dad's stepdaughter). The stepdaughter and my dad hated each other and I don't believe those were his wishes.

I had to petition her for a copy of the trust and it was a year before I saw it. I have no way of verifying all the amendments made to the trust, including a letter stating that my father and his wife intentionally left me and my brothers out of the will. The letter was never signed. My father said he'd leave us something, yet the stepdaughter received 60 percent of the estate. My brothers and I received absolutely nothing. Aren't we entitled to receive something from our father's estate?

It is unclear whether dad set up his own trust, or a joint trust with stepmother. If it was a joint trust, the stepmother may have had the legal ability to change the trust after your father passed away.  And though it is common for parents to tell their children they have left them something, it's the documents that control what happens to our estate when we die.

If dad had been advised differently, he could have set up a separate trust for his children. It would become irrevocable upon his death and would have protected any gift he wanted to make to them. The children are entitled to see copies of their father's trust and his will. The will should be lodged with the Superior Court in the county where he resided at time of death. If you have not seen these documents, request copies from the trust's heirs. 

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