Second Marriage & Beneficiaries Conundrum

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Diver4242
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Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Sun Mar 18, 2018 3:28 pm

I wonder if you could help with a bit of a puzzle my lovely wife and I have been trying to solve. We have the usual bunch of retirement and non-retirement accounts. Some of the latter ones, like our savings accounts, are joint ownership.

This is both of our second (and final!) marriage. I'm 60 this May, she's 58 in July. We live in NJ but should both be retiring soon and moving to PA or DE. I have three kids and my wife has two. All are adults except her 17 year old daughter. We calculated our share percentage of our total net worth by taking what we each brought into the marriage and then adding half of what we both earned/added since we've been married. We are liquid - no assets other than a car and no debt (we rent and pay off the cards each month).

The problem we'd like to solve is how do we set things up such that if one of us passes away, that person's children gets their share of our net worth?

We've been trying to do this with beneficiaries on the various accounts, but it's messy and complicated, especially when you get into joint ownership accounts, where the account passes to the surviving spouse. I thought about naming 'estate' as the beneficiary and sorting it out in the will but there's lots of downside to that.

Is there an easier way to go about this? I guess there's also the problem of making sure it's a fair split if we both go at once.

Thanks in advance!

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dm200
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Re: Second Marriage & Beneficiaries Conundrum

Post by dm200 » Sun Mar 18, 2018 3:33 pm

Diver4242 wrote:
Sun Mar 18, 2018 3:28 pm
I wonder if you could help with a bit of a puzzle my lovely wife and I have been trying to solve. We have the usual bunch of retirement and non-retirement accounts. Some of the latter ones, like our savings accounts, are joint ownership.
This is both of our second (and final!) marriage. I'm 60 this May, she's 58 in July. We live in NJ but should both be retiring soon and moving to PA or DE. I have three kids and my wife has two. All are adults except her 17 year old daughter. We calculated our share percentage of our total net worth by taking what we each brought into the marriage and then adding half of what we both earned/added since we've been married. We are liquid - no assets other than a car and no debt (we rent and pay off the cards each month).
The problem we'd like to solve is how do we set things up such that if one of us passes away, that person's children gets their share of our net worth?
We've been trying to do this with beneficiaries on the various accounts, but it's messy and complicated, especially when you get into joint ownership accounts, where the account passes to the surviving spouse. I thought about naming 'estate' as the beneficiary and sorting it out in the will but there's lots of downside to that.
Is there an easier way to go about this? I guess there's also the problem of making sure it's a fair split if we both go at once.
Thanks in advance!
Consulet an experienced estate attorney. I am sure this situation is very common.

I would NOT do this with beneficiaries on accounts, etc. You could have a mess and/or unintended consequences. I believe only a well thought out will and/or trust can accomplish what you want. One (of many) factors is how "congenial" the two sets of children are in being "fair" and respecting your (both) desires/wishes.

Do you want funds of the first deceased to go to his/her children right away OR only after second spouse dies?

delamer
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Re: Second Marriage & Beneficiaries Conundrum

Post by delamer » Sun Mar 18, 2018 3:38 pm

You both might want to read “Beyond the Grave” by Condon. Lots of good information on tricky situations.

But ultimately I agree that you need a good estate attorney to advise you.

Diver4242
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Re: Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Sun Mar 18, 2018 3:43 pm

dm200 wrote:
Sun Mar 18, 2018 3:33 pm
Diver4242 wrote:
Sun Mar 18, 2018 3:28 pm
I wonder if you could help with a bit of a puzzle my lovely wife and I have been trying to solve. We have the usual bunch of retirement and non-retirement accounts. Some of the latter ones, like our savings accounts, are joint ownership.
This is both of our second (and final!) marriage. I'm 60 this May, she's 58 in July. We live in NJ but should both be retiring soon and moving to PA or DE. I have three kids and my wife has two. All are adults except her 17 year old daughter. We calculated our share percentage of our total net worth by taking what we each brought into the marriage and then adding half of what we both earned/added since we've been married. We are liquid - no assets other than a car and no debt (we rent and pay off the cards each month).
The problem we'd like to solve is how do we set things up such that if one of us passes away, that person's children gets their share of our net worth?
We've been trying to do this with beneficiaries on the various accounts, but it's messy and complicated, especially when you get into joint ownership accounts, where the account passes to the surviving spouse. I thought about naming 'estate' as the beneficiary and sorting it out in the will but there's lots of downside to that.
Is there an easier way to go about this? I guess there's also the problem of making sure it's a fair split if we both go at once.
Thanks in advance!
Consulet an experienced estate attorney. I am sure this situation is very common.

I would NOT do this with beneficiaries on accounts, etc. You could have a mess and/or unintended consequences. I believe only a well thought out will and/or trust can accomplish what you want. One (of many) factors is how "congenial" the two sets of children are in being "fair" and respecting your (both) desires/wishes.

Do you want funds of the first deceased to go to his/her children right away OR only after second spouse dies?
Right away.

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dm200
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Re: Second Marriage & Beneficiaries Conundrum

Post by dm200 » Sun Mar 18, 2018 4:00 pm

Diver4242 wrote:
Sun Mar 18, 2018 3:43 pm
dm200 wrote:
Sun Mar 18, 2018 3:33 pm
Diver4242 wrote:
Sun Mar 18, 2018 3:28 pm
I wonder if you could help with a bit of a puzzle my lovely wife and I have been trying to solve. We have the usual bunch of retirement and non-retirement accounts. Some of the latter ones, like our savings accounts, are joint ownership.
This is both of our second (and final!) marriage. I'm 60 this May, she's 58 in July. We live in NJ but should both be retiring soon and moving to PA or DE. I have three kids and my wife has two. All are adults except her 17 year old daughter. We calculated our share percentage of our total net worth by taking what we each brought into the marriage and then adding half of what we both earned/added since we've been married. We are liquid - no assets other than a car and no debt (we rent and pay off the cards each month).
The problem we'd like to solve is how do we set things up such that if one of us passes away, that person's children gets their share of our net worth?
We've been trying to do this with beneficiaries on the various accounts, but it's messy and complicated, especially when you get into joint ownership accounts, where the account passes to the surviving spouse. I thought about naming 'estate' as the beneficiary and sorting it out in the will but there's lots of downside to that.
Is there an easier way to go about this? I guess there's also the problem of making sure it's a fair split if we both go at once.
Thanks in advance!
Consult an experienced estate attorney. I am sure this situation is very common.
I would NOT do this with beneficiaries on accounts, etc. You could have a mess and/or unintended consequences. I believe only a well thought out will and/or trust can accomplish what you want. One (of many) factors is how "congenial" the two sets of children are in being "fair" and respecting your (both) desires/wishes.
Do you want funds of the first deceased to go to his/her children right away OR only after second spouse dies?
Right away.
Certainly consult an estate attorney - and address the situation of both dying in close time periods.

That is probably simpler - right away, but I suspect the assets of each spouse would need to be structured as individually owned. The joint property/accounts might be a challenge - but an attorney can help.If everyone is "congenial" - then this may not be 100% precise, but the surviving spouse could choose to be fair and gift some more to them.

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Kenkat
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Re: Second Marriage & Beneficiaries Conundrum

Post by Kenkat » Sun Mar 18, 2018 4:04 pm

You should definitely consult with an estate attorney. A common way to accommodate what you are trying to do is to put your assets in a trust with your children as beneficiaries and your wife would do the same with her assets and children. Disposition of any assets held jointly such as real estate would also have to be made clear. Yours is a common situation and there are many ways to accomplish what you are going for but it is definitely something you want to be sure is set up correctly.

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Sandtrap
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Re: Second Marriage & Beneficiaries Conundrum

Post by Sandtrap » Sun Mar 18, 2018 4:53 pm

Seek legal counsel.
Ask about a "bypass" or "credit shelter" trust, if it applies to you.
Read:
Beyond the Grave: The Right Way and the Wrong Way of Leaving Money to Your Children (And Others) by Gerald M. Condon
https://www.amazon.com/gp/product/08873 ... UTF8&psc=1

The greater your assets, the more need to set things up correctly.
j

MrDrinkingWater
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Re: Second Marriage & Beneficiaries Conundrum

Post by MrDrinkingWater » Sun Mar 18, 2018 5:06 pm

Agree with all that you should consult with a good estate lawyer. Check to see if your state allows marital property control trusts. These are sometimes used by people in second marriages who have kids from first marriages.

fourwheelcycle
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Re: Second Marriage & Beneficiaries Conundrum

Post by fourwheelcycle » Sun Mar 18, 2018 6:30 pm

Right away? Are you sure you can each live on your calculated share of your combined net worth and you are comfortable giving up all claim to your spouse's share if they drop tomorrow??? If so, for each spouse's retirement accounts assign their children, in equal or other desired percentage shares, as the primary beneficiaries for the accounts. See my additional comment below.

For your taxable accounts, unjoint them (a word?) and work with an attorney to prepare an individual revocable trust for each spouse. The trusts can benefit each of you before you die, e.g., if you become disabled or mentally incompetent and need someone (the named successor trustee, perhaps) to step in as your DPOA for finances and health care. When you die, your trust can provide that your successor trustee will close out your estate, paying taxes and other obligations, and then distribute the remaining funds outright in equal shares or other desired percentages to each of your children (or via trusts until age XX, but my wife and I prefer outright).

A good attorney will question you about your wishes and write provisions in your trusts for a number of scenarios, e.g, one of your children dies at the same time as you (or within 30 or 60 days of you), coincidentally or in the same car or plane crash, and they leave one or more minor children who inherit your child's share. In that case you may want to set up trusts for the minor heirs with a final payout at age XX.

Regarding your retirement accounts, our attorney prepared supplemental beneficiary designation forms that we used for our children. The supplemental forms had the type type of "set up a trust" detail I noted above for beneficiaries who may die near in time to you and leave minor heirs. Vanguard accepted these forms and TIAA would have accepted them, but we moved our retirement money to Vanguard and Fidelity. Fidelity would not accept them, so we will probably be moving our Fidelity retirement money to Vanguard.

BigJohn
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Re: Second Marriage & Beneficiaries Conundrum

Post by BigJohn » Sun Mar 18, 2018 6:35 pm

I’d read the Condon book just to get educated on issues and potential solutions so you can ask the right questions. Then work with a good estate attorney to implement the plan. I’ve got no worries managing my own investment but would never take a DIY approach to estate planning and my situation isn’t nearly as complex as yours.

Diver4242
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Re: Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Sun Mar 18, 2018 6:37 pm

I rushed right off and bought Beyond the Grave based on several recommendations here. It looks like a great book, and I'll read it all. For now, I jumped right to chapter 28 "If You Are on Your Second Marriage, Who Will Get Your Half If You Die First - Your Children or the Children of Your Second Spouse?"

The author goes right into this situation that I've described, so I read on excitedly. His example uses an uncooperative spouse but my wife and I are both on board with this idea, so no worries there. He discusses the solution as a Surviving Spouse Life Estate Trust, which requires signatures from both spouses.

The only part where it failed me was where he goes on to say that maybe the deceased spouse's children don't want to wait until the surviving spouse dies to get their inheritance. At that point, the author just recommends giving those children money to purchase a life insurance policy on his life!? I don't want to add to our expenses, and that policy would be expensive.

I'm hoping the solution is as simple as a clause in the Surviving Spouse Life Estate Trust that says the deceased's children should be paid out of the estate immediately. That's what my wife and I both want. But I'm not sure why the author wouldn't just recommend this, rather than the expensive solution of a life insurance policy. He does go into putting in clauses as to how the money should be invested to make everyone happy, etc.

So we'll review the situation with an estate attorney and see what happens. The book doesn't state how to do the rest of this plan, i.e does the beneficiary on the various accounts then just point to the trust? I know that pointing beneficiaries to 'estate' is bad but not sure if that's the same thing and has the same drawbacks as far as tax hits for retirement accounts (IRA, 401k) and what to do about savings accounts that have joint ownership.

Thanks for all the help here, let's keep the discussion going!

Diver4242
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Re: Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Sun Mar 18, 2018 6:43 pm

fourwheelcycle wrote:
Sun Mar 18, 2018 6:30 pm
Right away? Are you sure you can each live on your calculated share of your combined net worth and you are comfortable giving up all claim to your spouse's share if they drop tomorrow??? If so, for each spouse's retirement accounts assign their children, in equal or other desired percentage shares, as the primary beneficiaries for the accounts. See my additional comment below.

For your taxable accounts, unjoint them (a word?) and work with an attorney to prepare an individual revocable trust for each spouse. The trusts can benefit each of you before you die, e.g., if you become disabled or mentally incompetent and need someone (the named successor trustee, perhaps) to step in as your DPOA for finances and health care. When you die, your trust can provide that your successor trustee will close out your estate, paying taxes and other obligations, and then distribute the remaining funds outright in equal shares or other desired percentages to each of your children (or via trusts until age XX, but my wife and I prefer outright).

A good attorney will question you about your wishes and write provisions in your trusts for a number of scenarios, e.g, one of your children dies at the same time as you (or within 30 or 60 days of you), coincidentally or in the same car or plane crash, and they leave one or more minor children who inherit your child's share. In that case you may want to set up trusts for the minor heirs with a final payout at age XX.

Regarding your retirement accounts, our attorney prepared supplemental beneficiary designation forms that we used for our children. The supplemental forms had the type type of "set up a trust" detail I noted above for beneficiaries who may die near in time to you and leave minor heirs. Vanguard accepted these forms and TIAA would have accepted them, but we moved our retirement money to Vanguard and Fidelity. Fidelity would not accept them, so we will probably be moving our Fidelity retirement money to Vanguard.
Yes - we did a calculation as to what each of us would get if we divorced, because that's what each of us would have to live on, and we just went with that (no plans to divorce!) as far as what we wanted our kids to get if one of us passed. I would put in the per stirpes clause so if one of the kids died, it passes to their kids. My wife is already with Vanguard primarily, and I'll be retiring soon and moving my 401k and IRA over to them, away from Fidelity as I like their fees and funds better.

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Watty
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Re: Second Marriage & Beneficiaries Conundrum

Post by Watty » Sun Mar 18, 2018 6:56 pm

Kenkat wrote:
Sun Mar 18, 2018 4:04 pm
You should definitely consult with an estate attorney. A common way to accommodate what you are trying to do is to put your assets in a trust with your children as beneficiaries and your wife would do the same with her assets and children. Disposition of any assets held jointly such as real estate would also have to be made clear. Yours is a common situation and there are many ways to accomplish what you are going for but it is definitely something you want to be sure is set up correctly.
+1

This is not a DIY situation.

I know of a situation with a seven figure estate that went something like this;

1) The husband of a retired couple with a seven figure net worth dies and leaves everything to his widow.
2) A few years later the widow remarries. They both had kids from earlier marriages.
3) The newly married couple updates both of their wills so that the surviving spouse would get the assets then when they die the assets would then be split fairly between all their kids.(This sounds like what you are trying to do.)
4) The woman dies a few years later and the second husband gets everything in his name.
5) The second husband then updates his will shortly after she dies so that his kids get everything
6) He dies and his kids get everything

The original couples kids checked with a lawyer and there was not anything that would be done so they were did not get a seven figure inheritance. (There was a lot more "drama" that I omitted." )

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CAsage
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Re: Second Marriage & Beneficiaries Conundrum

Post by CAsage » Sun Mar 18, 2018 7:06 pm

Would it be possible to arrange your accounts so that you kept the bulk of your separate accounts (that net worth % you had before marriage) in separate accounts (possibly separate banks/brokerages, to be real clear), and then have as joint accounts only those funded with current earnings and (if necessary) infusions from the separate? If you could isolate the premarital assets, then you could easily set up beneficiaries on those accounts to your separate children. To whatever extent you can simplify your assets, you will be ahead regardless of how the lawyer helps you structure the joint/overlapping areas.

And I read the "Beyond the Grave" book, and found it chock full of how things can go wrong, and how people can cheat and not carry out your wishes, but precious light on what to do about it. At least it had lots of examples so you can think those through to discuss with lovely new wife!
Salvia Clevelandii "Winifred Gilman" my favorite. YMMV; not a professional advisor.

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Re: Second Marriage & Beneficiaries Conundrum

Post by Gnirk » Sun Mar 18, 2018 7:41 pm

Second marriage, each of us have adult children from our previous marriages. We have joint checking accounts and each have a fairly small IRA, and we own two homes jointly with right of survivorship- main home and snowbird home.

All of our investments have been held separately. Of the total taxable investments, mine are a bit over 30%, his a bit under 70%. In our wills, we leave each other the houses, cars, furnishings, and IRAs. The remainder of our estates go to our individual children. His two children are beneficiaries on his taxable investment accounts, and my two children are beneficiaries on my taxable investment accounts. For us: easy-peasy.

Diver4242
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Re: Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Mon Mar 19, 2018 5:24 am

Gnirk wrote:
Sun Mar 18, 2018 7:41 pm
Second marriage, each of us have adult children from our previous marriages. We have joint checking accounts and each have a fairly small IRA, and we own two homes jointly with right of survivorship- main home and snowbird home.

All of our investments have been held separately. Of the total taxable investments, mine are a bit over 30%, his a bit under 70%. In our wills, we leave each other the houses, cars, furnishings, and IRAs. The remainder of our estates go to our individual children. His two children are beneficiaries on his taxable investment accounts, and my two children are beneficiaries on my taxable investment accounts. For us: easy-peasy.
Gnirk - this sounds like what we are driving toward. If I understand correctly, you have joint checking accts, each a small IRA, and then you each have taxable investment accounts (meaning they are 401ks or something, subject to tax on withdrawals?).

I wasn't sure what you meant when you said yours are a bit over 30%, his are a bit under 70%. Do you mean of the combined value of those taxable investment accounts?

The question is, what do you live off? If you are living from the gains in the taxable investment accounts, do you manage the withdrawals to keep everything in sync as far as that 30%/70% split and try not to draw down the principal (i.e living from just the dividends/income/share value increase?).

Thanks for your help!

vested1
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Re: Second Marriage & Beneficiaries Conundrum

Post by vested1 » Mon Mar 19, 2018 7:25 am

Of course it's messy, and likely to get messier. This is unavoidable when assets are divvied up between children of previous marriages while reducing assets of the surviving spouse. I'm not sure "Yours mine and ours" was ever meant to be taken so literally.

Sorry to be the dissenting voice here, but the OP asked how to make it simpler. The obvious answer for anyone else, since it may be too late for the OP is to not get married if you can't trust your spouse to treat your children from a previous marriage equitably upon your death, or especially while living.

I've always wondered how these particular hairs are split anyway. How do you judge which actions taken during the most recent marriage impact segregated savings. Which savings should you spend from if spending from one is judged to be shorting the children of the other, and who makes that decision? Does it require a family meeting where input is sought from inheriting children?

I suppose my wife (3rd in a series for me, 2nd for her) of 25 years and I will trust each other to be fair to our three children from previous marriages, and to not in any way put the financial freedom of the surviving spouse in question, reducing their assets by engaging in a gesture from beyond the grave. In fact, our trust is set up to divide assets equally among our children only after we are both dead. If any of them argue about the division they are cut out of the trust. Tough love.

If my wife suddenly has a severe personality shift after I die and cuts my children out of an inheritance then I guess they should have been more diligent about ensuring their own financial prospects. if they have any doubt that we love them they should take it up with us now, rather than derive some special meaning from an inheritance. If they fail in this regard I guess those thoughtful lessons on the meaning of a gift were unsuccessful.

No Soloman-like lawyers splitting the baby, no expectations of future unearned windfalls. Simple.

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Re: Second Marriage & Beneficiaries Conundrum

Post by Jags4186 » Mon Mar 19, 2018 7:47 am

Usually this would be taken care of in a prenuptial agreement. After the fact it is much more difficult to ensure the intended outcome. If you have concerns that your spouse may screw your kids, consider naming your children, not your spouse, as the primary POD beneficiaries on some of your accounts.

Another idea is to place each of your assets in a trust, with your spouse as the beneficiary on the trust's income in the event of one of your deaths, and then dissolution of the trust upon death of the 2nd spouse. The trust with your money goes to your kids, the trust with your wife's money goes to her kids.
Last edited by Jags4186 on Mon Mar 19, 2018 7:51 am, edited 1 time in total.

Leesbro63
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Re: Second Marriage & Beneficiaries Conundrum

Post by Leesbro63 » Mon Mar 19, 2018 7:51 am

There’s an old joke that applies here:

Grandma died before the grandkids were born. Grandpa remarried and the grandkids know his second wife, not REALLY their grandma, as “Granny”.

Eventually grandpa dies and shortly after, “Granny” comes for a visit. Little Susie runs up to Granny, all excited as she comes into the house and says “Granny, Granny, guess what? We’re going to Hawaii”. Granny replies “Wow! That’s great! When are you going?” To which Little Susie replies “when you die”. 😳

Diver4242
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Re: Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Mon Mar 19, 2018 7:56 am

Jags4186 wrote:
Mon Mar 19, 2018 7:47 am
Usually this would be taken care of in a prenuptial agreement. After the fact it is much more difficult to ensure the intended outcome. If you have concerns that your spouse may screw your kids, consider naming your children, not your spouse, as the primary POD beneficiaries on some of your accounts.
It's not so much about trusting my spouse, both of us feel this way. A lot of things can go wrong, for example what if I pass and my spouse remarries to someone who ends up to be devious, manipulative, bad with money, etc. What if my spouse develops dementia or something and upends the plan. Both of us would like to leave something to our adult kids when we pass, not later, as they are all hard working kids with very young kids of their own who will need help for college, etc. We don't want either set having to wait around for the other one of us to kick :-)

We have figured out the amounts that should go to the kids in the event one of us passes, and we're going to roll my 401k over to Vanguard when I'm retired (very soon) and split some of that up similar to how Gnirk described and allocate the beneficiaries accordingly. That will accomplish what we want. The only question is whether I can roll my 410k from fidelity to vanguard and split it into two IRAs, one for me and one for my wife.

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Re: Second Marriage & Beneficiaries Conundrum

Post by Da5id » Mon Mar 19, 2018 7:56 am

dm200 wrote:
Sun Mar 18, 2018 3:33 pm
I would NOT do this with beneficiaries on accounts, etc. You could have a mess and/or unintended consequences.
I agree. Happened with my family, different kids as a result got very different amounts when a parent died as there were per account beneficiaries as well as a will that split the other stuff evenly. Everyone was good about it and gifted $14k/year to those who got less until it was balanced, as all agreed that was the intent. But under other circumstances maybe could have been a family splitting mess. Things are bad enough when someone dies, don't cause unintended unequal distribution of assets to possibly cause conflict (if intended that is your prerogative of course).

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dm200
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Re: Second Marriage & Beneficiaries Conundrum

Post by dm200 » Mon Mar 19, 2018 9:55 am

The question or issue I would wonder about is whether the surviving spouse will or can be OK financially (as the deceased spouse would want) with zero of the deceased spouses assets (as would be calculated). I, for example, might want to make sure, financially, that my spouse would be OK financially after my death.

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Re: Second Marriage & Beneficiaries Conundrum

Post by engineerartist » Mon Mar 19, 2018 12:11 pm

Both of us are 36 years into our second marriage with adult children (and grandchildren) from our first marriages. While living in a community property state our attorney created A/B Trusts for us which we funded with our property and investment accounts.
After we moved to a non-community property state where probate is a much faster process, our attorney replaced the A/B Trusts with wills for each of us with testamentary trusts and our property and investments were re-titled as "Tenants in Common".
This has a similar effect to the A/B Trust, allowing the surviving spouse to retain control of and benefit from the income from the estate while ensuring that the children of the deceased spouse benefit from the estate eventually.
Both the original A/B Trust and the wills were executed by estate attorneys, which I also strongly recommend.
Retired - dividend growth investor

retiringwhen
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Re: Second Marriage & Beneficiaries Conundrum

Post by retiringwhen » Mon Mar 19, 2018 12:27 pm

CAsage wrote:
Sun Mar 18, 2018 7:06 pm
And I read the "Beyond the Grave" book, and found it chock full of how things can go wrong, and how people can cheat and not carry out your wishes, but precious light on what to do about it. At least it had lots of examples so you can think those through to discuss with lovely new wife!
If you had told me to read "Beyond the Grave" two years ago, I would have scoffed at the tales of woe in that book. Since then I can say that a long string of issues related to a reasonably well planned estate, an irresponsible child, second marriages and young trust beneficiaries made me realize just how realistic the book's careful and dim view of the human family wrt to money and inheritance is....

Be careful to consider the ramifications of either person dying, the consequences of their living spouse's support and maintenance and how that affects the eventual beneficiaries (dead spouse's children). Do not dismiss the idea of buying life insurance to provide an inheritance to living children after you die, but while the couple's funds are used to maintain the living spouse (and may or may not be consumed by that spouse's needs). That move may be one of the best ways to keep peace in the family that I know of.... Also consider long-term consequences of tying up homes in trusts for similar reasons.

Families that get along wonderfully can be seriously torn by legitimate differences in needs and perceptions after death of a parent/spouse especially in blended families.

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djpeteski
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Re: Second Marriage & Beneficiaries Conundrum

Post by djpeteski » Mon Mar 19, 2018 1:01 pm

I do not want to be negative, but this may not be your last marriages. It may very well be the case that your love may not fail, but there are other things that can happen.

One of you may pass while the other is still relatively young. The survivor may wish to remarry.

To beat that dead horse, a good estate attorney will help you plan for that contingency.

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onthecusp
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Re: Second Marriage & Beneficiaries Conundrum

Post by onthecusp » Mon Mar 19, 2018 1:03 pm

retiringwhen wrote:
Mon Mar 19, 2018 12:27 pm
CAsage wrote:
Sun Mar 18, 2018 7:06 pm
And I read the "Beyond the Grave" book, and found it chock full of how things can go wrong, and how people can cheat and not carry out your wishes, but precious light on what to do about it. At least it had lots of examples so you can think those through to discuss with lovely new wife!
If you had told me to read "Beyond the Grave" two years ago, I would have scoffed at the tales of woe in that book. Since then I can say that a long string of issues related to a reasonably well planned estate, an irresponsible child, second marriages and young trust beneficiaries made me realize just how realistic the book's careful and dim view of the human family wrt to money and inheritance is....

Be careful to consider the ramifications of either person dying, the consequences of their living spouse's support and maintenance and how that affects the eventual beneficiaries (dead spouse's children). Do not dismiss the idea of buying life insurance to provide an inheritance to living children after you die, but while the couple's funds are used to maintain the living spouse (and may or may not be consumed by that spouse's needs). That move may be one of the best ways to keep peace in the family that I know of.... Also consider long-term consequences of tying up homes in trusts for similar reasons.

Families that get along wonderfully can be seriously torn by legitimate differences in needs and perceptions after death of a parent/spouse especially in blended families.
So true. My story has a happy ending (mostly) and yet it could have gone very wrong, very easily. My father was very concerned about "bad scenarios" when he was setting up mom and dad's revocable trust's and wills. He was planning to use a third party as executor and trustee to settle the estate, a relatively simple one with no remarriage involved. My sister and I convinced him that we would not have such issues that could not be worked out and she and I were named co-executors/trustees. And it worked, we saved money on the third party, did quite a bit of work ourselves, we and our siblings are happy with ultimate outcome. Part of why it worked was asking for opinions and buy in from the other siblings, and honestly being willing to compromise on many things.

Yet there were issues. How long to take to clean out the house / divide up the goods, then sell real estate. Whether to sell the real estate. Whether to use a realtor. Etc. Living in different states, there was a wide disparity in work involved despite attempts to balance it out, with attendant tension and friction. The worst outburst came from a grandchild who did not think the division method was respectful enough and / or was not fair in respect to how my siblings and I decided to include the grandchildren in a "picking process."

In the end I think it brought us closer together and we could see how each other had grown and matured over the years, but it could have easily gone astray with one misstep or slight.

Specify what you can and a lawyer can help make it stick.

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Re: Second Marriage & Beneficiaries Conundrum

Post by mptfan » Mon Mar 19, 2018 2:42 pm

Watty wrote:
Sun Mar 18, 2018 6:56 pm
I know of a situation with a seven figure estate that went something like this;

1) The husband of a retired couple with a seven figure net worth dies and leaves everything to his widow.
2) A few years later the widow remarries. They both had kids from earlier marriages.
3) The newly married couple updates both of their wills so that the surviving spouse would get the assets then when they die the assets would then be split fairly between all their kids.(This sounds like what you are trying to do.)
4) The woman dies a few years later and the second husband gets everything in his name.
5) The second husband then updates his will shortly after she dies so that his kids get everything
6) He dies and his kids get everything

The original couples kids checked with a lawyer and there was not anything that would be done so they were did not get a seven figure inheritance. (There was a lot more "drama" that I omitted." )
I think this scenario illustrates why a spouse in a blended family (where the children are not in common from both spouses) who intends to leave something to his or her kids should make arrangements to do so directly upon that spouse's death without the involvement of the surviving spouse. To do anything else is a mistake.

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Re: Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Mon Mar 19, 2018 2:45 pm

mptfan wrote:
Mon Mar 19, 2018 2:42 pm
Watty wrote:
Sun Mar 18, 2018 6:56 pm
I know of a situation with a seven figure estate that went something like this;

1) The husband of a retired couple with a seven figure net worth dies and leaves everything to his widow.
2) A few years later the widow remarries. They both had kids from earlier marriages.
3) The newly married couple updates both of their wills so that the surviving spouse would get the assets then when they die the assets would then be split fairly between all their kids.(This sounds like what you are trying to do.)
4) The woman dies a few years later and the second husband gets everything in his name.
5) The second husband then updates his will shortly after she dies so that his kids get everything
6) He dies and his kids get everything

The original couples kids checked with a lawyer and there was not anything that would be done so they were did not get a seven figure inheritance. (There was a lot more "drama" that I omitted." )
I think this scenario illustrates why a spouse in a blended family (where the children are not in common from both spouses) who intends to leave something to his or her kids should make arrangements to do so directly upon that spouse's death without the involvement of the surviving spouse. To do anything else is a mistake.
With you 100% on that! It's exactly what we're going for. People change, circumstances change. If you can't do it by allocating separate funds, then do it with life insurance.

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Re: Second Marriage & Beneficiaries Conundrum

Post by retiringwhen » Mon Mar 19, 2018 2:48 pm

mptfan wrote:
Mon Mar 19, 2018 2:42 pm
Watty wrote:
Sun Mar 18, 2018 6:56 pm
I know of a situation with a seven figure estate that went something like this;

1) The husband of a retired couple with a seven figure net worth dies and leaves everything to his widow.
2) A few years later the widow remarries. They both had kids from earlier marriages.
3) The newly married couple updates both of their wills so that the surviving spouse would get the assets then when they die the assets would then be split fairly between all their kids.(This sounds like what you are trying to do.)
4) The woman dies a few years later and the second husband gets everything in his name.
5) The second husband then updates his will shortly after she dies so that his kids get everything
6) He dies and his kids get everything

The original couples kids checked with a lawyer and there was not anything that would be done so they were did not get a seven figure inheritance. (There was a lot more "drama" that I omitted." )
I think this scenario illustrates why a spouse in a blended family (where the children are not in common from both spouses) who intends to leave something to his or her kids should make arrangements to do so directly upon that spouse's death without the involvement of the surviving spouse. To do anything else is a mistake.
I concur. Additionally, as per the joke above about the grand-child and Disney World, don't make the bulk of the reward/bequest fully contingent upon the death of the second spouse.....

They can and should be remainder beneficiaries, but it should be seen as remote/contingent and a "bonus"

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Re: Second Marriage & Beneficiaries Conundrum

Post by dm200 » Mon Mar 19, 2018 5:42 pm

When my wife and I were married many decades ago, and before any child(ren) - we did simple wills (by an attorney). My will made my wife the primary and full beneficiary and her will made me the primary and full beneficiary.

"My" assets were considerably more than my wife's at the time - and her family (parents), for various reasons, was more financially challenged than mine.

We figured out that if we both died and made the secondary beneficaries of our wills our respective family/parents - and we died close together - there could be a severe situation of "unintended consequences". She died - all her assets go to me - then I die and all goes to my parent(s)/family.

The solution was easy - we each made the secondary beneficiaries half to our parent/family - that way the goal would be accomplished.

Never implemented - both DW and I still living and our parents long deceased.

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Re: Second Marriage & Beneficiaries Conundrum

Post by celia » Mon Mar 19, 2018 5:55 pm

The solution you seek involves keeping all your pre-marriage accounts separate. Don't co-mingle them as joint assets. And see an estate lawyer.

Also check the current beneficiaries for all your accounts. If an ex is listed, he/she may end up with your share of the estate/ company retirement plan

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Re: Second Marriage & Beneficiaries Conundrum

Post by denovo » Mon Mar 19, 2018 6:00 pm

Watty wrote:
Sun Mar 18, 2018 6:56 pm
Kenkat wrote:
Sun Mar 18, 2018 4:04 pm
You should definitely consult with an estate attorney. A common way to accommodate what you are trying to do is to put your assets in a trust with your children as beneficiaries and your wife would do the same with her assets and children. Disposition of any assets held jointly such as real estate would also have to be made clear. Yours is a common situation and there are many ways to accomplish what you are going for but it is definitely something you want to be sure is set up correctly.
+1




3) The newly married couple updates both of their wills so that the surviving spouse would get the assets then when they die the assets would then be split fairly between all their kids.(This sounds like what you are trying to do.)
Maybe I misread OP and his follow-up posts, but it seems that both spouses agreed their share of assets would immediately go to the children upon one's demise.
"Don't trust everything you read on the Internet"- Abraham Lincoln

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Re: Second Marriage & Beneficiaries Conundrum

Post by denovo » Mon Mar 19, 2018 6:04 pm

Diver4242 wrote:
Sun Mar 18, 2018 3:28 pm
Iworth?

We've been trying to do this with beneficiaries on the various accounts, but it's messy and complicated, especially when you get into joint ownership accounts, where the account passes to the surviving spouse. I thought about naming 'estate' as the beneficiary and sorting it out in the will but there's lots of downside to that.

Is there an easier way to go about this? I guess there's also the problem of making sure it's a fair split if we both go at once.

Thanks in advance!
I would recc. seeing a lawyer because some states have presumptions about spousal shares and so forth even if you designate children as beneficiaries, and the spouse would have to make a specific disavowal.

However, I think the simplest thing to do, as others have suggested, is to divide all asset accounts into an individual ownership and have TOD designations of the children for said accounts.

As per Watty's grim example above, I believe you are doing the right thing to leave things for the children when you pass.
"Don't trust everything you read on the Internet"- Abraham Lincoln

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Re: Second Marriage & Beneficiaries Conundrum

Post by BigJohn » Mon Mar 19, 2018 6:21 pm

mptfan wrote:
Mon Mar 19, 2018 2:42 pm
I think this scenario illustrates why a spouse in a blended family (where the children are not in common from both spouses) who intends to leave something to his or her kids should make arrangements to do so directly upon that spouse's death without the involvement of the surviving spouse. To do anything else is a mistake.
This is clean and simple but.... what if their joint house is a major asset? The surviving spouse either has to move or the deceased spouse’s kids have to wait for thier share of that asset. The fact that the couple views this as fair does not mean the kids will have the same view of fairness. Another tough scenario is where the deceased spouse had the bulk of the premarital assets. Do you impoverish the surviving spouse or make the kids wait for some of the assets?

If you read the whole Condon book you’ll come away with a perspective on how wrong the perception that “the kids will be reasonable” can be. I second the comment above regarding changed perspectives. Years ago I would have dismissed those stories as the very rare exception. However, real life experiences I’ve heard in my Alzheimers caregivers support group has made it clear that these circumstances are a lot more common than you expect.

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Re: Second Marriage & Beneficiaries Conundrum

Post by mptfan » Mon Mar 19, 2018 6:51 pm

BigJohn wrote:
Mon Mar 19, 2018 6:21 pm
mptfan wrote:
Mon Mar 19, 2018 2:42 pm
I think this scenario illustrates why a spouse in a blended family (where the children are not in common from both spouses) who intends to leave something to his or her kids should make arrangements to do so directly upon that spouse's death without the involvement of the surviving spouse. To do anything else is a mistake.
This is clean and simple but.... what if their joint house is a major asset? The surviving spouse either has to move or the deceased spouse’s kids have to wait for thier share of that asset. The fact that the couple views this as fair does not mean the kids will have the same view of fairness. Another tough scenario is where the deceased spouse had the bulk of the premarital assets. Do you impoverish the surviving spouse or make the kids wait for some of the assets?
I did not mean to imply that a spouse must pass ALL of their assets to their individual children upon death to the exclusion of the spouse, I meant to say that to the extent that a spouse intends to pass some of their assets to their children, they should make arrangements to do so immediately upon death.

Of course the spouse could and should make a reasonable decision as to what assets should pass to the surviving spouse and what assets should pass to their children. In general I think it would be reasonable for a spouse in a blended family to make arrangements to pass the marital home to the surviving spouse and not the children. In the situation where one spouse has the bulk of premarital assets, the spouse should also make a determination as to how much of the assets will pass to the spouse and to the kids in light of all the circumstances, and I generally agree that the surviving spouse should not be left impoverished for the sake of the kids.

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Re: Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Mon Mar 19, 2018 6:59 pm

denovo wrote:
Mon Mar 19, 2018 6:00 pm
Watty wrote:
Sun Mar 18, 2018 6:56 pm
Kenkat wrote:
Sun Mar 18, 2018 4:04 pm
You should definitely consult with an estate attorney. A common way to accommodate what you are trying to do is to put your assets in a trust with your children as beneficiaries and your wife would do the same with her assets and children. Disposition of any assets held jointly such as real estate would also have to be made clear. Yours is a common situation and there are many ways to accomplish what you are going for but it is definitely something you want to be sure is set up correctly.
+1




3) The newly married couple updates both of their wills so that the surviving spouse would get the assets then when they die the assets would then be split fairly between all their kids.(This sounds like what you are trying to do.)
Maybe I misread OP and his follow-up posts, but it seems that both spouses agreed their share of assets would immediately go to the children upon one's demise.
This is true, but upon further discussion we've dialed it back some, providing an agreed-upon share to each of our kids from our first marriages, while leaving enough for the surviving spouse to live on. So the kids got dialed back some :-)

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Re: Second Marriage & Beneficiaries Conundrum

Post by pennywise » Mon Mar 19, 2018 7:13 pm

BigJohn wrote:
Mon Mar 19, 2018 6:21 pm
This is clean and simple but.... what if their joint house is a major asset? The surviving spouse either has to move or the deceased spouse’s kids have to wait for their share of that asset. The fact that the couple views this as fair does not mean the kids will have the same view of fairness. Another tough scenario is where the deceased spouse had the bulk of the premarital assets. Do you impoverish the surviving spouse or make the kids wait for some of the assets?
My father and stepmother set up (stepmother's insistence) an interesting way of dealing with the marital home, which had originally been his when they married. The will stipulated that upon the death of the first partner the house would be appraised and market value established. If/when the surviving spouse died, sold the house or remarried(!) the house was to be sold and the proceeds split such that the children of the one who died first would receive 50% of the fair market value of the house at the time of the death. The other half plus any increase in market value would go to the children of the second partner to die. Otherwise they each willed the assets they brought into the marriage to their respective children with the dispersal of those assets to take place upon the death of the parent.

As it turned out my stepmother died first, her will left a rather large 401K balance to her daughters and the house was appraised for market value. My dad is living there as a widower and at 84 YO probably won't remarry.

Our side of the family (survivor's progeny) thought it was a very weird plan and even the estate lawyer said he'd not seen any other couple do that--usually the marital residence simply passes along to the surviving spouse. As noted above there are a lot of feelings that churn around inheritances and my stepmother's daughters have been rather vocal in their insistence that they get everything they feel entitled to have. My siblings and I want my dad to be happy and prosper, so however he set up his will and estate is fine with us. Still, I'm guessing there will be some tense moments some day when the time comes to finalize this particular inheritance arrangement :confused .

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Re: Second Marriage & Beneficiaries Conundrum

Post by retiringwhen » Mon Mar 19, 2018 7:25 pm

pennywise wrote:
Mon Mar 19, 2018 7:13 pm
BigJohn wrote:
Mon Mar 19, 2018 6:21 pm
This is clean and simple but.... what if their joint house is a major asset? The surviving spouse either has to move or the deceased spouse’s kids have to wait for their share of that asset. The fact that the couple views this as fair does not mean the kids will have the same view of fairness. Another tough scenario is where the deceased spouse had the bulk of the premarital assets. Do you impoverish the surviving spouse or make the kids wait for some of the assets?
My father and stepmother set up (stepmother's insistence) an interesting way of dealing with the marital home, which had originally been his when they married. The will stipulated that upon the death of the first partner the house would be appraised and market value established. If/when the surviving spouse died, sold the house or remarried(!) the house was to be sold and the proceeds split such that the children of the one who died first would receive 50% of the fair market value of the house at the time of the death. The other half plus any increase in market value would go to the children of the second partner to die. Otherwise they each willed the assets they brought into the marriage to their respective children with the dispersal of those assets to take place upon the death of the parent.

As it turned out my stepmother died first, her will left a rather large 401K balance to her daughters and the house was appraised for market value. My dad is living there as a widower and at 84 YO probably won't remarry.

Our side of the family (survivor's progeny) thought it was a very weird plan and even the estate lawyer said he'd not seen any other couple do that--usually the marital residence simply passes along to the surviving spouse. As noted above there are a lot of feelings that churn around inheritances and my stepmother's daughters have been rather vocal in their insistence that they get everything they feel entitled to have. My siblings and I want my dad to be happy and prosper, so however he set up his will and estate is fine with us. Still, I'm guessing there will be some tense moments some day when the time comes to finalize this particular inheritance arrangement :confused .
That is actually a pretty good plan. the children got the major portion of the inheritance (I assume) at the time of their parent's passing and a residual after the second dies... Of course it does keep part of the family (the deceased's children) an interested party long after their "interest" has passed.... but no plan is perfect...

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Re: Second Marriage & Beneficiaries Conundrum

Post by Gnirk » Mon Mar 19, 2018 7:59 pm

Diver4242 wrote:
Mon Mar 19, 2018 5:24 am
Gnirk wrote:
Sun Mar 18, 2018 7:41 pm
Second marriage, each of us have adult children from our previous marriages. We have joint checking accounts and each have a fairly small IRA, and we own two homes jointly with right of survivorship- main home and snowbird home.

All of our investments have been held separately. Of the total taxable investments, mine are a bit over 30%, his a bit under 70%. In our wills, we leave each other the houses, cars, furnishings, and IRAs. The remainder of our estates go to our individual children. His two children are beneficiaries on his taxable investment accounts, and my two children are beneficiaries on my taxable investment accounts. For us: easy-peasy.
Gnirk - this sounds like what we are driving toward. If I understand correctly, you have joint checking accts, each a small IRA, and then you each have taxable investment accounts (meaning they are 401ks or something, subject to tax on withdrawals?).

I wasn't sure what you meant when you said yours are a bit over 30%, his are a bit under 70%. Do you mean of the combined value of those taxable investment accounts?

The question is, what do you live off? If you are living from the gains in the taxable investment accounts, do you manage the withdrawals to keep everything in sync as far as that 30%/70% split and try not to draw down the principal (i.e living from just the dividends/income/share value increase?).

Thanks for your help!
We each have separate individual taxable accounts at Vanguard. Those percentages I quoted are based on the current total of the taxable accounts. And yes, we live off of our SS, RMDs, and tax exempt interest from muni bonds and muni bond funds. We reinvest dividends and capital gains from our equity funds to maintain our AA’s, so our “principal” has increased. We are both fairly frugal for the most part, but do spend on travel while we’re still able to be physically active. I am more conservative in my AA than my DH.

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Re: Second Marriage & Beneficiaries Conundrum

Post by BigJohn » Mon Mar 19, 2018 8:37 pm

mptfan wrote:
Mon Mar 19, 2018 6:51 pm
I did not mean to imply that a spouse must pass ALL of their assets to their individual children upon death to the exclusion of the spouse, I meant to say that to the extent that a spouse intends to pass some of their assets to their children, they should make arrangements to do so immediately upon death.
I understood that mptfan. You're suggestion is good for those assets that can reasonably be passed at the first spouses death. However, if the house or life style maintenance assets not passed at that time are large, lots of very negative family drama can be created. Feeling entitled to an inheritance can do strange things to people. I know of one example where his kids resent and attempt to block the wife spending "their inheritance" on their own father's Alzheimer's care.

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Re: Second Marriage & Beneficiaries Conundrum

Post by inbox788 » Mon Mar 19, 2018 9:54 pm

It's a complicated situation that's further complicated by joint accounts. This seems like a situation where separate individual accounts would be simpler. You still need a couple account for joint expenses, but each having their own individual account with POD to their children seems to solve some of the problem. I've been trying to learn about the tenants in common vs joint ( http://estate.findlaw.com/planning-an-e ... -and-.html ), and this is probably something you'd want to address with property.

If this is a large estate, then definitely consult an attorney, but if it's just some financial accounts and a home, you might find a simple solution. The most complicated part will be how to allow the surviving spouse to live in the home and the how it's split after the second person passes.

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Re: Second Marriage & Beneficiaries Conundrum

Post by MrsBDG » Tue Apr 03, 2018 8:50 pm

proceeds split such that the children of the one who died first would receive 50% of the fair market value of the house at the time of the death. The other half plus any increase in market value would go to the children of the second partner to die.
So, Mom dies, her kids get nothing at the time, but when the house is sold after Dad dies, which could be 5-10-20 years later, Mom's kids get 1/2 of the value at Mom's death, but none of the appreciation, yet they did not have access to the funds to invest in the intervening years. Am I missing something? I am imagining a house in SoCal, Mom dies in 2009, it's worth $700k, Dad dies in 2018, it's worth 1.5MM, that could make for some rough discussions at disbursement time.

Of course, you did say it was Dad's house, so Mom's kids should feel lucky to get any share, but what if Dad had died first?

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Re: Second Marriage & Beneficiaries Conundrum

Post by HIinvestor » Tue Apr 03, 2018 9:11 pm

One other question to consider—are you sure there will be sufficient assets for the survivor to live comfortably after the kids of 1st to die take their inheritances? What happens if the survivor runs out of assets? (Of course if there are huge assets, this may never happen, but care later in life can be VERY costly.)

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Re: Second Marriage & Beneficiaries Conundrum

Post by msk » Tue Apr 03, 2018 10:12 pm

We sorted out this mess by having separate investment accounts for each pot, even though they are all under our joint names. Joint Account A gets inherited by Kids A, B by Kids B, C is to be inherited by the whole crowd with specified fractions, etc. All Joint Accounts with survivor rights. We listed the accounts and properties and both of us signed the document and placed it in a safe. All our kids are on good terms with each other and we expect that they will all stick to the documented splits if we both die simultaneously. If one spouse goes earlier then we expect the surviving spouse will execute the wishes of the dead one. All very informal...

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Re: Second Marriage & Beneficiaries Conundrum

Post by Diver4242 » Wed Apr 04, 2018 8:10 am

" If one spouse goes earlier then we expect the surviving spouse will execute the wishes of the dead one."

Eh. I dunno. Maybe my spouse and I watch too much Dateline and 48 Hours :-) "The best laid plans..." and all that. It gives us comfort to know it will happen automatically.

I started this thread and my spouse is following as well. We've set up a spreadsheet and worked out how to set up the beneficiaries on the accounts such that if one of us dies, that person's kids will get paid out as we agreed immediately, and the surviving spouse will have enough to live on comfortably.

The challenge going forward will be to monitor and adjust the accounts to keep this where we want it. It's very simple with the spreadsheet. We did factor in a tax factor for the pre-tax (IRA) accounts. We do a monthly 'financial meeting' together where we review how well we did with our budget categories, etc. This will have to be a part of that. We also have to watch our drawdowns from the accounts to keep things in sync. A small hassle since we don't have a ton of different accounts, but us it's better than paying lawyers a ton of money to generate documents that have to be constantly changed. Beneficiaries are simple and take precedence.

If we end up having to draw down more than we wanted to over time, of course the kids get less. All of them :-)

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Re: Second Marriage & Beneficiaries Conundrum

Post by dm200 » Wed Apr 04, 2018 8:18 am

So much depends on family details - I/we are not in this situation, but it seems to me that, if the family situation is good, you might do something like this:

1. For part of each spouse's assets - leave some part (maybe half?) to children equally (in a will so that more complicatedsituations such as child prdeceases and has his/her dependents).

2. For other part - leave to spouse with understanding that, if not needed, it would be given or left (in will) to children, etc.

3. Provide in wills for both parties death's within a short time

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Re: Second Marriage & Beneficiaries Conundrum

Post by Leesbro63 » Wed Apr 04, 2018 10:48 am

I don't think I like any situation where the intended outcome depends on the surviving spouse to voluntarily follow the plan. Too much can go wrong. A new spouse for the surviving spouse. A surviving spouse who becomes impaired and has a Power of Attorney that acts in the interest of surviving spouse's kids to the detriment of the predeceased spouse's kids.

The problem for most (but maybe not most Bogleheads) is that the surviving spouse needs all of the assets. So leaving his/her portion, outright, upon death, hurts the surviving spouse. So a Trust seems like the best way to handle this. And even with a Trust, unintended stuff can happen, such as a surviving spouse spending years in an expensive nursing home or a Trustee who has a bias toward one set of adult children vs the other. Sadly, the honest truth is that adult children of remarried parents run a much higher risk of not getting "family assets". I suspect I'll get flamed here for viewing someone's nest egg as entitled future property of their children. It's a fair point, inheritances are not entitlements. But in most situations, remarried spouses want their own children to get their own stuff and not the children of the second spouse.

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Re: Second Marriage & Beneficiaries Conundrum

Post by dm200 » Wed Apr 04, 2018 11:45 am

Leesbro63 wrote:
Wed Apr 04, 2018 10:48 am
I don't think I like any situation where the intended outcome depends on the surviving spouse to voluntarily follow the plan. Too much can go wrong. A new spouse for the surviving spouse. A surviving spouse who becomes impaired and has a Power of Attorney that acts in the interest of surviving spouse's kids to the detriment of the predeceased spouse's kids.
There are certainly risks - but I believe that a great number of such situations would or could be handled, to a degree, in a fair way for all concerned.

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Re: Second Marriage & Beneficiaries Conundrum

Post by delamer » Wed Apr 04, 2018 2:03 pm

dm200 wrote:
Wed Apr 04, 2018 11:45 am
Leesbro63 wrote:
Wed Apr 04, 2018 10:48 am
I don't think I like any situation where the intended outcome depends on the surviving spouse to voluntarily follow the plan. Too much can go wrong. A new spouse for the surviving spouse. A surviving spouse who becomes impaired and has a Power of Attorney that acts in the interest of surviving spouse's kids to the detriment of the predeceased spouse's kids.
There are certainly risks - but I believe that a great number of such situations would or could be handled, to a degree, in a fair way for all concerned.
Maybe. But expecting things to materialize as anticipated and relying on everyone’s good will runs contrary to what I know about life and human nature. In my family, there is a history of dementia. People can’t make good decisions when they are impaired, no matter their intentions of 20 years before.

I agree with Leesbro63’s post.

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Re: Second Marriage & Beneficiaries Conundrum

Post by dm200 » Thu Apr 05, 2018 9:18 am

delamer wrote:
Wed Apr 04, 2018 2:03 pm
dm200 wrote:
Wed Apr 04, 2018 11:45 am
Leesbro63 wrote:
Wed Apr 04, 2018 10:48 am
I don't think I like any situation where the intended outcome depends on the surviving spouse to voluntarily follow the plan. Too much can go wrong. A new spouse for the surviving spouse. A surviving spouse who becomes impaired and has a Power of Attorney that acts in the interest of surviving spouse's kids to the detriment of the predeceased spouse's kids.
There are certainly risks - but I believe that a great number of such situations would or could be handled, to a degree, in a fair way for all concerned.
Maybe. But expecting things to materialize as anticipated and relying on everyone’s good will runs contrary to what I know about life and human nature. In my family, there is a history of dementia. People can’t make good decisions when they are impaired, no matter their intentions of 20 years before.
I agree with Leesbro63’s post.
I have seen and heard of BOTH situations - some where very bad things happen and some where very good things happen - and occasionally there are some unintended consequences.

Just like some divorce situations - the more common "nasty" situations vs. the ex becomes a member of the family. A relative of mine married someone with a previous marriage and a small child with the ex - In this case my relative is on very good terms with the ex as is the spouse with her ex. That ex is a regular at family functions, etc.

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