What is the fairest way to determine who gets what in a blended family?
Estate Planning for a Second Marriage
Preparing for the Inevitable
Estate Planning for the Soon-To-Be-Retired
What Is a Revocable Living Trust?
Inheritance in a Second Marriage
Second Marriage Estate Planning
I am in need of advice. I am widowed and remarried. My husband has three children and I have one. What is the fair way to handle the estate of our home in our will? My husband doesn't make 75% of the income, nor is he paying 75% of the mortgage and property taxes. I could use any suggestions from the subscribers as to what has worked for them. Thank you in advance.
Leave Your Estate to Your Child
In your situation, if you each have sizable estates, I would suggest leaving your estate to your own children.
My husband has three grown children and we have one minor child together. Neither of us had much before we married. In our wills, each of us is the primary beneficiary of the other; however, should we die together, his four children will equally inherit his half of our estate, and our child will inherit 100% of my half of our estate.
San Jose, CA
Factor "Sweat Equity" in Estate Planning
The writer did not indicate age or length of marriage, so my suggestion may or may not work for this couple. My second husband and I have been married for fourteen years, and we purchased our home at the time of our marriage. I was the one with the cash at the time of the purchase, but he was the one holding a job and paying the utility bills and the real estate taxes. Plus he does a lot of yard work and repairs. I proposed that he was earning "sweat equity" in the house, which I decided to value as his part of the ownership. Therefore, our wills each leave the house to the survivor between the two of us. After we are both gone, the net proceeds from the sale of our home will be divided fifty-fifty to our respective estates. The fact that I have three children and he has two children does not alter the equation. My three will divide my half, and his two will split his half.
CR in Pa.
Consult a Trust and Estate Attorney
First and foremost, you need to put the deed of the house in trust. If you and your hubby's name are both on the title with joint tenancy, than whoever survives will inherit the home and the child(ren) of the partner who died will not inherit anything.
You and your hubby should own the trust. When you pass, your child would own half, and when your hubby passes, his children will each own a third of the other half. You will make stipulations that the survivor will live in the house. Once both partners have passed on, or when the surviving partner wants to sell the house, the house must be sold for fair market value, with half going to you or your child and the other half going to your husband or his three children.
A trust and estate attorney will be much better at explaining this. I think this is one area where you cannot be frugal; you need to spend money and hire an attorney to make sure your desires will be carried out and conform to your state laws.
Level Off the Financial Field
In my experience as a personal financial consultant, second marriage finances can be a very difficult subject. There are a multitude of factors to consider. In your case, you need to answer the following questions and they should guide you in your financial and estate planning.
First, what did each of you bring into the marriage? Make a list of property (i.e. cars, land, home, savings, investments, etc.) Also, make list of debts that you both brought into the marriage (i.e. child support, house payments, car payments, student loans, etc.) This will give you a place to start.
Second, assess where you are today. List current property values, savings and investments, and debt. This is not about who makes more. It is about where the money has gone since your marriage.
Compare and debit and credit as much as possible. This will tell you where you stand now in comparison to where you both started. It should also give you the ratio for which you are looking.
With this information on hand, you can draw up a financial plan. I recommend a plan that covers 1 year, 3 years, 5 years, and 10 years. Once you have completed all of these steps, you can begin to fairly develop an estate plan. Both of you should sit down and see what you would like to leave your children. You may want to make some changes. For example, you may want to increase his life insurance coverage so that his children receive more cash and less of the mutual estate. There are numerous ways to level off the financial field, so that you can both be happy when it comes to estate planning in a second marriage.
Calculator: What's My Net Worth?
Whatever you decide, remember to do it in a way that promotes love and understanding with each other and within your blended family.
Dorothy, Personal Financial Consultant
Take the Next Step
- Should you DIY your own estate plan?
- Make sure you're getting the best CD rate. Use our simple CD tool to find out. It's completely private, easy to use and you'll know what rate is available to you in seconds!
- Get the interest you deserve! Compare money market and savings account rates with our best rate finder. It only takes a minute and your privacy is completely protected.
- Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!
Debt from my past is preventing me from saving for my future! Tell us: Yes, debt is hindering my ability to save and I could use help dealing with it! or No, debt is not a problem but I am trying to get ahead financially!
More Money Tips & Tools
- How to get a faster tax refund
- Personal finance calculators everyone should use
- Why you should know your credit card payment cutoff time
- Saving-money secrets of the rich and frugal
- 5 low-risk ways to earn higher interest now
- How to save money fast
- 7 IRA withdrawals that don't trigger a penalty
- This week's Readers' Tips