A modern family, Bob and Sue have been married for 6 years. They have both been married previously, Bob twice and Sue once. Bob has no children and Sue has three. Sue was a successful businesswoman and has amassed substantial savings. Bob was a well-respected arts administrator who dedicated his life to public service.
Sue dearly loves Bob and wants to ensure he is taken care of. As her substantial savings are held in checking, saving, brokerage, and retirement accounts she simply makes Bob the payable on death beneficiary of all her accounts. She does not see the need to make up a Will. Sue and Bob discuss that Bob would of course always take care of Sue’s children and eventually leave any remaining money to Sue’s children upon Bob’s death.
Sadly, Sue passes away. A year later, Bob gets a job offer across the country and decides to move, and a year later meets Jill, falls in love, and tells Sue’s children he wants to introduce them to Jill who he now plans to marry. Jill has two children from a prior relationship. Sue’s children feel that it is disrespectful to Sue’s memory for Bob to remarry so soon. After Bob takes Jill on a lavish vacation, this evolves into a substantial rift between Bob and Sue’s children. Angry with their reaction, Bob marries Jill and writes out a new Will leaving her everything he owns and leaving nothing to Sue’s children.
So, were Sue’s wishes carried out?
No. Sue clearly loved both Bob and her children and expressed to both that she wanted her assets used to take care of Bob for the remainder of his life but also to help ensure her children were cared for with the money that remained. Sue also intended that Bob would financially help out her children to help them get their start in life. Further, she was always extremely clear that she wished to avoid any family strife, working hard to maintain healthy and honest relationships with her husband and her children. Instead, Sue’s money will likely end up belonging to Jill and the family relationship between Bob and Sue’s children is irreparable damaged.
What If There Had Been A Will?
While every situation for every client is different, Sue could have worked with a lawyer to craft a Estate Plan and a Will which would have helped carry out her wishes. In this case, Sue could have established a Trust for the benefit of Bob which would have allowed Bob to use money for his own needs during the remainder of his life. At the same time the money would remain in the trust and on Bob’s death would be passed onto Sue’s children. The plan could also have included additional terms such as to allow Sue’s children to access some of the money in Trust during Bob’s lifetime – perhaps to attend college, buy a home, or to start a business.
While many people shy away from making a Will, or consulting an attorney in general, in this case, it is certainly clear that meeting with an attorney would have at least helped Sue and Bob become aware of the potential issues in a mixed family situation and avoided a great deal of complication, bad blood, and expense.
Redding Law, PLLC intends this educational hypothetical illustrate a situation where the laws of the State of Texas could lead to extremely unexpected results, but could have been easily addressed in a Will. However, the reader should note that this explanation is specific to Texas and is not intended to be legal advice for any person or situation. To receive additional copies of this newsletter or permission to reprint any portion please contact Redding Law, PLLC.