Changing my will

[FJC]

My current wife has two kids from a previous marriage who have treated both of us badly. I leave a portion of my estate to my wife but in the event that she dies within a short time of my death, her kids will benefit.

Can someone advise me how I can make sure that her kids don't get their mitts on my money?

 

[anteater]

I leave a portion of my estate to my wife but in the event that she dies within a short time of my death, her kids will benefit.

It doesn't have to be only a "short time." Once she has outright ownership, she can leave her assets to whomever she wishes.

1) You leave her what you wish in your will and get her assurance that none of it will end up in her kids' mitts and then you trust her. (Trust me, after you pass away, you won't know and won't care.)

2) Create a trust -either a living trust now or a testamentary trust through your will.

 

[FJC]

Thank you, anteater. Your response was much appreciated.

Is there a way that the trust can make yearly payments to my wife instead of giving her a lump sum? These payments would end upon her death. An example is that $250,000 be paid over ten years at $25,000 per year. Assuming she lives ten years, she would inherit the full amount but if her death precedes that the balance would revert back to the trust.

 

[Kiawah]

Is there a way that the trust can make yearly payments to my wife instead of giving her a lump sum?

Yes.


You can set up your trust, so that when you die the 'income' (and/or some of the principle if you also want), can be used by your wife. When she dies, those original assets go to someone else (some nephews on your side of the family, a charity, me, etc). If you'd rather, you could set it up that the assets are held in a trust for xx years, and skip a generation and go to the grandchildren.

Read up further on trust's. If you are legal language inclined, you can read through a number of different types of trusts by purchasing a legal reference/templates manual. I've been very happy with ElderLaw Forms Manual, by Harry S. Margolis, published by Aspen Publishers. It's a very large, 2 volume set. It's pretty pricey, but if you do enough research with this manual, you will have enough knowledge to have some very productive discussions with a lawyer, and save hours of legal time. It also has all of the other forms you'd want to have built at the same time (wills, POA's, health care POA's, etc). It also has explanations, where it explains why certain paragraphs and phrases are put in, and what they achieve. It explains options, where it says thingts like: if you want to achieve A, put this language in. if you want to achieve B, put that language in.

Local lawyer will ensure your documents he creates comply w/state specific laws.

Oh, and I should mention.....for high valued estates to avoid taxes, you actually want to pass the assets on to someone else besides your spouse. If you let all of your assets go to her, then when she dies her combined higher assets could put her over the limit where they now get taxed. You effectively loose your exemption. I have some assets which are in trust for my kids (but could be anyone), where wife has access to the income generated while she's alive (5 and 5).

 

[nextwife]

However, that would only apply to your share of the marital assets. She has a right to her share of marital assets right away.

 

[FJC]

Regarding marital assets, there is a postnuptual agreement that says all assets will be distributed according to my will. It divides 40% to my wife, 40% to my daughter and 10% each to my two sisters. The trust includes lots of Florida real estate. Each parcel will probably be sold separately over time. With each sale I'd like to see the proceeds distributed according to the terms of the will. However, if the various parcels are sold together and a lump sum of cash goes into the trust, instead of my wife being able to take out the 40% due her, I want her to get a percentage every year. That amount, for example, could be $25,000. That will insure continued income for my wife and also that anything left over will not go to her daughters.

Any further thoughts would be appreciated.

 

[Kiawah]

Create the trust document, and re-title assets into the trust so they then are controlled by the trust document. Described in the trust document are how you want the distribution of those trust assets to occur (whenever, wherever, and to whomever you want). You get it all set up now.

 

[FJC]

Once again to one and all, thank you for taking the time to answer my questions.