His, Hers & Theirs

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Your Ex-Spouse

     Without proper legal planning, your ex-spouse (as surviving parent/guardian) would likely be appointed by the probate court to manage the inheritance you leave to your children. To make matters worse, what if your children later predecease your ex-spouse, and are single and childless at that time? Who would inherit your assets then? That is right ... your ex-spouse, as the next-of-kin of your children.

Your New Spouse

     Chances are you made a few solemn promises to your new spouse on your wedding day. Among them were promises to be there through thick and thin, personally and financially. Accordingly, most spouses in blended families tend to blend their wealth, too.
     Warning: If you predecease your new spouse, then you may forever disinherit your own children from your share of such blended wealth! Thereafter, upon the death of your new spouse, your assets may be inherited by your stepchildren, or even by your new spouse's next spouse and their children.

Your Own Children

     Regardless of whether children are reared in a traditional nuclear family or in a blended family, great care should be given to protect any inheritance both for them and from them. Wealth representing a lifetime of your hard work and thrift can be squandered in very short order, or can quickly vanish through divorces, lawsuits and bankruptcies.

Your Estate Taxes

     Aside from disinheriting your own children, blending your wealth with your new spouse may unnecessarily enrich the IRS. How? The Internal Revenue Code provides an exemption to each taxpayer for purposes of sheltering a certain estate dollar value from federal estate taxes (with marginal rates reaching nearly 50 percent). However, this is a use it or lose it exemption and you lose it when title to your blended assets vests in your new spouse upon your death. In addition to disinheriting your own children, this mistake alone can trigger hundreds of thousands of dollars in unnecessary estate taxes.

Answers:

     First answer: Henry Fonda and Lucille Ball.
     Second answer: The Brady Bunch, of course!

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