We often write about why it’s so important to have an estate plan. We write about how estate plans allow you to make the process of estate administration more simple and less expensive for your loved ones. And of course we write about how a good estate plan can allow you to protect your loved ones and your assets. But one of the biggest reasons – and often the most overlooked – is so that the right people will receive your property when you pass away. This is most often a problem with a blended family.
Bill and Susan’s Second Marriage
Consider the following blended family:
Bill and Susan are married to each other, and they both have children from previous marriages. Bill has a daughter, Emily, age 45, and Susan has a son, Michael, age 40.
Bill and Susan have been married for 20 years. They both came into the marriage with some assets, and together they’ve accumulated more. Even though Emily and Michael were adults and out of the house when Bill and Susan got married, they all get along well and view themselves as family. Bill and Susan have never actually made an estate plan, but they both want their assets to be divided equally between Emily and Michael when they have both passed away.
Bill gets sick and passes away. Everything that he owns is either owned jointly with right of survivorship with Susan or it has Susan as the beneficiary, so after Bill’s death Susan owns everything. A few months later Susan dies as well. Emily and Michael go to an attorney to help with the estate.
What Really Happens for their Blended Family
We know from the above scenario that Bill and Susan wanted their assets to be divided equally between Emily and Michael. Unfortunately, because they never made an estate plan that will not be the result.
Someone who dies without an estate plan is said to be “intestate.” When someone doesn’t make an estate plan of their own, the assets they owned at the time of their death still need to go to someone, so the State of Ohio has a statute (Ohio Revised Code section 2105.06) directing who those assets will go to. Those people are called the decedent’s “heirs.” This statute directs the assets to the person’s closest living relatives. At top of the list is the person’s spouse, and if they did not have a spouse when they died, then the person’s children are the next choice.
In the above scenario, both Bill and Susan died intestate. Bill’s assets passed directly to Susan through joint ownership and beneficiary designations, so it wasn’t necessary to use the intestate statute to get the assets to Susan. However, Susan was the sole owner of the assets when she died, so her assets would be controlled by her estate plan, if she had one. Since she didn’t, we have to use the intestate statute.
Susan did not have a spouse at the time of her death, so we go to her next level of heirs, which would be her children. Susan’s only child is Michael, so Michael is her sole heir. Susan may have considered Emily to be her daughter, but Emily was not legally Susan’s child, so Emily is not one of Susan’s heirs.
As a result, Michael will receive all of Bill and Susan’s property, and Emily won’t receive any.
Make your Own Plan
A good estate plan will allow you to control who receives your property when you pass away. If you are a part of blended family, make sure that the right planning is in place to get the assets to the right people. An experienced estate planning attorney can guide you through your options and make sure you and your loved ones are protected. You can request an appointment with one of our attorneys for a free initial consultation.
About The Author: Richard Chamberlain
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