Honey, I’ve Disinherited the Kids – Accidental Disinheritance

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Most couples have common concerns no matter their background, profession or net worth.  They want to make sure that if something happens to one of them, their spouse will be provided for.  And, if something should happen to both of them, the kids will be taken care of.  Because it seems simple enough to pass assets to each other through joint ownership and beneficiary designations, many spouses fail to do any further estate planning.  Unfortunately, this can result in parents unintentionally disinheriting their children.   

What typically happens is, years after the death of the first spouse, the surviving spouse gets remarried.  Over time, the name of the new spouse is placed on bank accounts and other assets for convenience.  It’s easier to pay bills, run errands and handle investment decisions this way.  No one is concerned because each spouse has a will or trust in place that says upon death, the majority of their assets will pass to their children from their first marriage.  However, most people are unaware that community property, joint title or a beneficiary designation will trump a will or trust. 

So if, after your death, your spouse remarries and combines assets with his or her new spouse, the new spouse has certain rights to community and joint property.  In a community property state such as Louisiana, even a second spouse that is left out of a will has a right to half of any joint or community property after the death of their spouse. Half of these assets will legally pass to the new spouse even if there is a will or trust that says the assets of the deceased spouse should go to the children from the first marriage.  While this wasn’t your intention, it’s too late to fix it.  You may have accidentally disinherited your kids from receiving half of their inheritance.

Another serious and unintended outcome could occur if you and your second spouse are killed in a common disaster. Absent a declaration by you prior to your death stating otherwise, Louisiana Law presumes the older spouse died first. If you are the older spouse and designated your second spouse as beneficiary of your IRA, then your second spouse would inherit your IRA which then would be inherited by the children of your second spouse. Again, you have accidentally disinherited your kids.

Fortunately, there are solutions to these problems. With proper estate planning and asset protection provided by a knowledgeable attorney, you can put an estate plan in place to make sure the assets you accumulated with your first spouse pass to the children from that marriage.  Trust planning now will provide you the necessary control so you do not deprive your children of their inheritance. You can have peace of mind knowing that as life continues to change, your family will not experience the pain and detachment associated with an accidental disinheritance of your children.

To learn what kind of planning will support your family’s needs, contact an attorney with the Estate Planning Law Center at (318) 445-4516 to schedule a free, no obligation consultation.