Blended family plans bequests

Q: My wife and I both have been previously married, and each of us has one child from those marriages. Our wills leave everything to each other, with the children named as contingent beneficiaries at 50 percent each. Is there a way to keep the surviving spouse from changing his or her will and leaving everything to his or her own child?

A:

It is possible for spouses to bind each other to a particular disposition after one spouse dies. For instance, spouses can make their wills contractual or they can make a revocable trust become irrevocable when the first spouse dies. However, almost no lawyers ever draft documents this way, for good reason.

One potential problem is that the surviving spouse might live for decades, with no ability to change the estate plan. Another issue is enforceability, which might be nearly impossible if too many years pass and the surviving spouse moves to a new state or country.

And for many people, the majority of their investments and assets pass outside of a will or revocable trust by beneficiary

designation, right of survivorship or some other method.

A surviving spouse can also give away assets while alive, thus leaving very little to give away at death.

If you are the surviving spouse, you could lose touch with her child after your wife’s death. Or

worse, the two of you could have a falling-out. The last thing you would want is to be obligated to give half of everything you own to that child.

Fortunately, there are better ways to deal with a second-marriage situation.

Rather than give each other everything when one of you dies, the spouse who dies first can make a large bequest to his or her child. All other assets would be

left to the surviving spouse.

Unfortunately, though, there are often not enough assets to make this work. Therefore, another common approach is to buy life insurance on each spouse’s life that would payable to the children.

And if your combined estate is large enough — for instance, a few million dollars or more — the plan could be structured so the spouse who dies first leaves

their half of the estate to a trust for the other spouse. The trust could be written to allow for income and some trust principal to be distributed to the surviving spouse, but when the surviving spouse dies, the trust would pass to the child of the spouse who died first.

The key to this plan, though, is naming the right trustee. If you name the surviving spouse as the

trustee, there might not be any trust property left when the surviving spouse dies. Sometimes, it is best to name a corporate trustee (such as the trust department at a bank) to serve as a trustee for this type of trust.

The information in this column is intended to provide a general understanding of the law, not legal advice. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances. Ronald Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to stateyourcase @lipmanpc.com