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jean44

Guest
My husband and I married 11/2 years ago. He wants to set up a trust for his children from a previous marriage so that they will inherit everything he had before our marriage. He has invested in CDs and bought property in both our names but insists that it was bought with money from his marital estate before we were married. Right now, according to him, I am not entitled to anything we have including the home I share with him because it was his before we married. We had no prenuptial agreement and he often refers to the home and property he owns as ours. Now he wants to set up a trust for his adult children to insure them that everything we now share together will be theirs someday. He wants to let me have half of anything that we might gain separate from the trust. I don't know if I have any legal rights as his wife or not. I do not plan on divorcing him, but I would like for it to be clear what is ours and what is his children's by inheritance. I am a resident of Arkansas.
 


ALawyer

Senior Member
It sounds as if you and your husband are or soon may be having marital problems, especially if he starts to feel "you are in it for HIS money".

First, understand that it is VERY normal for a husband to want to protect the children from his first marriage, and leave them what he had before the marriage, at least at the outset of the second marriage. That is particularly the case if the kids have significant needs, or they are not economically self-sufficient. It also would be the case if you are otherwise financially well off as a result of your own assets, income and/or earning power. It does not mean that he does not love you, but rather that he feels an obligation to the kids.

However, particularly with time, he also should feel some sense of financial obligation to you, and you to him, particularly if one party lacks financial resources and/or has undertaken significant financially oriented sacrifices for the other. For example, if you stopped working because "he did not want you to" you would have have hurt your financial security, and were he to pass away, leaving you with nothing to reflect the financial sacrifice you made seems very unfair. Also, the psychological impact of having to move out of the house you shared right away so his kids can sell it and pocket the money is not appealing either; on the other hand, were you to "get the house" and then remarry and continue to live there with your new husband, while the kids got nothing, doesn't sound very fair either, does it?

In most second marriages a couple should have a candid discussion before they get married as to what would happen "if", and prepare a "pre-nuptual" agreement setting that forth. (A premarital agreement should be prepared by a lawyer, and should be reviewed by the other spouse's lawyer well in advance of the ceremony.) A creative approach that is sometime used is to have the new spouses start by leaving the other a very small share of the financial assets the other owned, and providing in the agreement that over time that share would increase; the agreement could also provide for the truly personal items each brought into the marriage to all go to the children right away.

Although you did not do a pre-martial agreement, it is not too late. Nearly all states recognize a "post-nuptual agreement" as well. This also should be done with separate lawyers for both spouses. (Usuing separate lawyers does NOT mean that things must become truly adversarial.)

As far as "HIS" house is concerned, what sometimes is done is that the written estate plan privides the survivor is given the right to occupy the home as a primary residence, rent free (with the survivor paying for operating expenses and taxes), for as long as the marriage was in force, or until remarriage, whichever comes first. The length of time in the house naturally increases each year; if the spouse dies after 4 years of marriage, the survivor can live there for 4 years from the death, unless she remarries. Those arrangements, while a bit more complicated to draft than the traditional "life estate" for the spouse are often far more appropriate.

With a "life estate" the survivor would have the right to use of the property for her entire lifetime, regardless of remarriage, and would not have to live there but could rent it out for her entire lifetime. Only after her death would go to his kids or their heirs. Given increased life expectancies, that may be 40 years or more from now, even for couples in their 60s.

As for promises to "leave everything you leave me to your kids on my death", not only are oral promises usually wholly unenforceable, but even when done in writing, it is far too difficult to enforce. And people can live a very long time. It requires a good lawyer to do things right, but consider this. Lawyers are far less expensive than marriage counselors.

One last thought. It often also makes sense to buy a life insurance policy to protect the second spouse's financial security should there be an early death. While life insurance costs far mor at age 65 than 35, if the parties are in decent health, it is suprisingly inexpensive to buy a 5 - 10 year term life insurance policy at age 65 or even higher to cover the financial issues.

[Edited by ALawyer on 01-08-2001 at 02:26 PM]
 

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