National Estate Planning Awareness Week (Oct. 16-22, 2017) is intended to raise public awareness about the importance of estate planning. In recognition of National Estate Planning Awareness Week, this is the first article in a series on estate planning debacles and their consequences.
The lack of advanced planning can lead to hardship, financial or otherwise, for both you and your loves ones. Could this estate planning debacle happen to you?
Unintentionally Disinheriting Children
Marla (age 48) and Tom (age 52) have two college-aged children, Peter and Erika. The couple have basic wills in place that leave everything to the surviving spouse and then to the children. Tom becomes sick and dies with a sizeable estate, including a $1 million life insurance policy, that passes to Marla.
Five years later, Marla decides to get re-married. She marries Rick, who has a 16-year old son. Marla, unaware of the consequences, does not take steps to protect her children byconsidering additional estate planning options. She passes away suddenly in a car accident. Rick, as the surviving spouse, inherits all of Marla’s assets, leaving Marla’s children, Peter and Erika, with no inheritance.
Estate Planning Lessons Learned
Traditional estate planning distributes an estate to the surviving spouse and then to the children. Since a surviving spouse has no legal obligation to support or provide an inheritance for the predeceased spouse’s children, Marla unknowingly disinherited her natural children by having all assets in her estate pass to her husband, Rick.
If Marla and Tom had relied on the estate planning tool known as a Revocable Living Trust, as opposed to having just wills alone, they could have protected their assets for Peter and Erika. One of the biggest benefits of a Revocable Living Trust is that it can be designed to protect assets from a future second spouse and the second spouse’s family.
Contact Socius Law Firm today to learn more about a Revocable Living Trust as well as other comprehensive estate planning options today. While nobody wants to think about their death, establishing an estate plan is one of the most important steps you can take to protect yourself and your loved ones.