29 Aug Complicated “Modern” Families Lead to Complicated Estates
Complicated “Modern” Families Lead to Complicated Estates
By: Barry E. Haimo, Esq.
August 29, 2014
Even just a few generations ago, the words “till death do you part” had a very concrete meaning for most people. Marrying someone truly did mean spending your life with them except in very rare circumstances. People tied the knot, had kids, and grew old together – that was your family, and it was incredibly clear cut.
Today, things are a lot hazier. Divorce rates are over 50%, and it’s not uncommon for people to marry several times and have children with multiple partners. There has also been an increase in the number of people having children out of wedlock. Consequently, this can lead to a lot of turmoil and unintended consequences if someone dies before engaging in estate planning.
How so? Let’s look at the story of Melinda.
When Melinda was still in high school, she and Rob fell deeply in love. It was clear to both of them that they were destined for each other, and they gave themselves over to their love utterly and completely. This led to Melinda having a baby, Jenna, during her senior year in high school.
Both she and Rob were good, smart kids with parents who wanted the best for them and helped them in every way they could. Because of this, both of them were still able to attend college – Melinda close to home so she could juggle school with motherhood and Rob out of state because he’d gotten a full ride at a top university.
Both of them loved Jenna unconditionally and worked hard to spend time with her and keep their relationship strong, but it wasn’t easy being so far apart, and eventually they broke up because both of them had simply became different people.
Melinda graduated and became a nurse, and found the second love of her life – a doctor at her hospital who not only treated her like a queen, but also adored Jenna. After a whirlwind romance, they were married and Melinda couldn’t have been happier.
Until she realized that she wasn’t the only woman in her husband’s life. He was cheating on her with at least two other women, but she tried to go to counseling and make it work with him because she wanted Jenna to have a good life.
After a decade of lies and betrayal, though, he divorced her for a younger woman and completely abandoned both her and Jenna. Her only consolation was that the judge gave her everything she asked for in the divorce proceedings, ensuring that she and Jenna would never have to worry about money.
Still, Melinda was desperate for her daughter to have a father (and for companionship herself), so she started seeing a man, Ben, who seemed to understand what she was going through. He, too, had been cheated on, and he, too, had children from another marriage. They got along extremely well and after a long courtship were married. Unfortunately, their children didn’t really like each other, and Melinda’s new husband never really warmed to Jenna either.
Despite this, they stayed together for the next 20 years, until cancer finally caught up with Melinda. By this time, Jenna had two young children of her own and a husband in the Marines, so there was some small consolation that her mother’s death would help them out financially – or so she thought. It was money that they sorely needed, and Melinda had already been giving Jenna a sort of monthly “allowance” to help out. Unfortunately, such was not the case. As it turned out, Melinda had never done any financial planning for her death, so all of her money went straight to Ben.
Jenna tried to reason with him, arguing that her mother clearly would have wanted her to have the money, but he wouldn’t be moved – if she’d wanted Jenna to have it, Melinda would have set it up that way. Besides, Jenna had been mooching off of them for long enough now and needed to stand up on her own two feet. He not only didn’t give her the money, he stopped paying the “allowance” that Melinda had set up and instead used her money to travel the world and eventually remarry, rarely seeing Jenna or her children.
What Melinda should have done was sit down with an estate planning attorney and create a Last Will and Testament, Trust, or some other kind of estate planning instrument that would have assured that her daughter received her money. All too often people put off this kind of planning because they don’t think they have the time or money, or simply rationalize that there’s plenty of time for them to do it later, but if something goes wrong, the surviving family members will be the ones who pay the price.
Don’t leave your children’s financial future up to state laws – a little of your time now can mean all the difference for them after you’re gone.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
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