Reply to elderly father remarrying and inheritance question

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[quote=Anonymous]Consider a Marital Trust. Suggest this to your FIL. Use an estate attorney. We have used this in our extended family twice.

The first was with my grandfather who got remarried late in life after my grandmother passed away. He married a woman who had some means, but he had more. She had grown children and grandchildren. This was her third marriage. (The whole family liked her from the time we met her and that feeling continued until she passed away herself, so that helps.)

My grandfather gave a sum of money to his adult children out of his estate while he was alive (some of it tax free over time). Then he put everything else into a Marital Trust that would take effect on his death. He named two Trustees from a younger generation. Your  husband and SIL would be appropriate.

Upon my grandfather’s death, the Trustees managed this Trust and paid money out of it to his widow for her expenses for the rest of her life. What these expenses are should be discussed ahead, especially considering that in your case his widow has her own means. These trustees dealt with the taxes for the Trust and the investing of the money in it. It does require a bit of time involvement. But it enabled my grandfather to feel that she was going to be okay.

Upon her death many years later, the Trust was dissolved and the remainder was divided according to a percentage and checks were mailed to my grandfather’s grandchildren. Each grandchild got a check for about 6% of what was left (there are many grandchildren). My grandfather wanted the remainder of the Trust to be given to the grandchild generation because his own adult children were retired and all of them had plenty of money.

My spouse and I have done our estate plan and have set up Marital Trusts in the same way (two of them). This will ensure that the bulk of our estate eventually goes to our descendants if either of us should die and the other remarries. We would not want our estate to go to the second spouse in its entirety and then eventually to his/her descendants which is what would happen if there was no estate plan.

My extended family is very open about talking about these kind of arrangements. There is nothing gained by saying “Grandpa should do what he wants with his money” when Grandpa may not know what the options are for estate planning. Information is important.

A Marital Trust may not work for your situation, but know that such a vehicle exists.

Also, your FIL should fill out a healthcare living will. This can be drawn up by the estate attorney, or you can pick up a form at your local hospital. Have him name his adult children as decision makers. If he does not do that, it will default to his second wife. You do not know if she will be of sound mind to make decisions in the future on his behalf and you don’t want to have to go through a process of redoing that paperwork if she becomes senile before he passes away, etc.

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