Remarried -- how best to structure my will/trust for my adult children.

[Anonymous]

I'm meeting with a lawyer to revise my will and trust tomorrow after getting remarried last month. I'm trying to figure out how to articulate what to ask for and what questions I might need to ask.

Circumstances are these: I'm 54. My new wife is 50. We are both in good health. My children are 23 and 21. Everyone gets along fine.

I bring more assets into the marriage than her -- I owned my home, I have more in retirement accounts. Moreover, I believe my ex-wife is entitled to some portion of my pension (I forget what the QDRO says, but we've been divorced for about seven years, so what I've accrued since then is my own). New wife has her own pension which will be more generous than mine despite my higher salary (she's a public school teacher and will have 30 years in when she retires).

There is a very simple prenup that basically says our retirement accounts are our own and there would be no alimony in the event of divorce. It also walls off a certain amount of home equity that was accrued before she moved in. I intend to put her on title and put in prenup that she gets 50% of future home appreciation as of her move-in date (which was a couple of years before the wedding) as she contributes to the mortgage.

I've already decided to name her as the decision maker on my AMD. I'm comfortable with that. The kids would be second in line.

From a money perspective, my goals are simple: I want to be sure she is provided for in the event of me preceding her in death while also preserving assets for my children. At the same time, I want her to have the right to live in the home we share as long as she wants without the kids forcing her to sell to liquidate the house (should she decide that's what she wants). But I don't want all my assets to transfer to her in their entirety because 1) I want my kids to get something; and 2) I want to protect them should she need nursing care down the line, etc.

Can the trust be set up to hold my assets for my children but pay her an income from it in the event of my death? I have my best friend named as trustee. Can I put her on title of the house if the house is currently in trust?

There could also be future inheritances from my own parents and hers. I assume for legal purposes we'll keep those separate.

Thanks for any insights or suggestions about what I should be asking.

[Anonymous]

Talk to the lawyer about all of this. Not us.

[Anonymous]

You are making this ultra complicated. Don’t put conditions on inheritance like giving her a salary if you predecease her or letting her live in a home where your kids also have ownership. Do not put her on the title. Pick a nice round number that you’re comfortable with, leave that for her and leave the rest of your assets to your kids.

I have all my assets in my trust. My current husband is the beneficiary of a life insurance policy. My trust assets go to my son. If they want to work something out after I’m gone my husband can buy the house from my estate with the life insurance proceeds or go live somewhere else. He has his own assets that we want him to leave to his kids. We’re similar ages to you and your new wife.

[Anonymous]

This is what your conversation with the lawyer tomorrow will be about.

[Anonymous]

Why not help your kids be set for life by the time they are 40. No need to leave them anything after that.

[Anonymous]

Talk to your lawyer. You have to leave her at least ~ 33% of your estate, or she can contest it and claim a spousal elective share, unless this was waived explicitly in the prenup.

[Anonymous]

My FIL never remarried because of things like this. Put it all in a trust and be very clear who gets what. I know adults who lost entire inheritances (and at least one was old money) to step parents and step siblings. My own FIL made sure no spouse could never touch the inherence and it goes straight to grandkids. A second person (non-spouse) has to sign off on anything trust related. I am comfortable financially and I am glad my children are taken care of. I would advise you to do something similar.

[Anonymous]

Anonymous wrote:My FIL never remarried because of things like this. Put it all in a trust and be very clear who gets what. I know adults who lost entire inheritances (and at least one was old money) to step parents and step siblings. My own FIL made sure no spouse could never touch the inherence and it goes straight to grandkids. A second person (non-spouse) has to sign off on anything trust related. I am comfortable financially and I am glad my children are taken care of. I would advise you to do something similar.

You FIL is a sensible man. OP and any person who remarries when a second set of biological kids are not part of the plan is a fool. Why not have a long term relationship with the new woman and leave it at that?

[Anonymous]

Ridiculous idea to get remarried. Just cohabitate.

[Anonymous]

Yes, OP, you can set it up exactly the way you want with the lawyer. Ignore all these people telling you that what you want is ridiculous (they can decide for themselves what to do with your assets). Your plan makes perfect sense for someone recently married but who may live for another 30-40 years. It seems like you are taking all of your responsibilities seriously. Good luck.

[Anonymous]

Anonymous wrote:My FIL never remarried because of things like this. Put it all in a trust and be very clear who gets what. I know adults who lost entire inheritances (and at least one was old money) to step parents and step siblings. My own FIL made sure no spouse could never touch the inherence and it goes straight to grandkids. A second person (non-spouse) has to sign off on anything trust related. I am comfortable financially and I am glad my children are taken care of. I would advise you to do something similar.

This happened to me. Everything left to my stepfather and stepbrother. And yes, it was “old money”. Money that have been passed down several generations, so it’s not like my mother earned it or something. It should have remained in our family. I spoke with an attorney who had done a previous trust for my mother, a trust that left everything to me, and he suggested that my mother was not in her right mind when the new trust — the one benefiting my step brother— was drawn up. In fact, she had discussed with that attorney that she didn’t want anything at all going to her husband or any member of his family, because he had not treated her very well (which was true). Ultimately, though, it was not something we were going to be able to prove in court. One of the things that annoys me the most is that my stepfather had plenty of his own money, and left a couple million of his own to his son. They had plenty of money. They didn’t need my mother’s. But this happened anyway.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My FIL never remarried because of things like this. Put it all in a trust and be very clear who gets what. I know adults who lost entire inheritances (and at least one was old money) to step parents and step siblings. My own FIL made sure no spouse could never touch the inherence and it goes straight to grandkids. A second person (non-spouse) has to sign off on anything trust related. I am comfortable financially and I am glad my children are taken care of. I would advise you to do something similar.

This happened to me. Everything left to my stepfather and stepbrother. And yes, it was “old money”. Money that have been passed down several generations, so it’s not like my mother earned it or something. It should have remained in our family. I spoke with an attorney who had done a previous trust for my mother, a trust that left everything to me, and he suggested that my mother was not in her right mind when the new trust — the one benefiting my step brother— was drawn up. In fact, she had discussed with that attorney that she didn’t want anything at all going to her husband or any member of his family, because he had not treated her very well (which was true). Ultimately, though, it was not something we were going to be able to prove in court. One of the things that annoys me the most is that my stepfather had plenty of his own money, and left a couple million of his own to his son. They had plenty of money. They didn’t need my mother’s. But this happened anyway.

It's too bad the old money trust wasn't set up so your mother couldn't access the principal. Most of them are. When my parents were recently working on their estate plan, I specifically asked them to set up their trust so that it goes from me to my kids. A current or future spouse can't access it. And I am not the trustee.

[Anonymous]

It’s shocking to me that people who are old money don’t walk it off. Bonkers.

[Anonymous]

Does your new wife have kids of her own that she wants to protect/leave something for?

[Anonymous]

Anonymous wrote:Talk to your lawyer. You have to leave her at least ~ 33% of your estate, or she can contest it and claim a spousal elective share, unless this was waived explicitly in the prenup.

This is inaccurate. She can claim 1/3, but he does not have to leave her 1/3. My dad didn't leave his second wife anything, and she didn't claim her elective share by the six-month deadline. As a result, she only received the $10,000 mandatory spousal allowance. Had she claimed the elective share, she would've received it by law, but it is not automatic.