Dear Moneyist,
My dad is 70 years old and has amassed a nest egg of more than $2 million. He dated my stepmother for 20-plus years before marrying her three years ago.
My brother and I are our father’s only kids, and our stepmother has no children. My father has a will, but I have no idea what it says. He is under the assumption that everything will work out once he dies — and he trusts his wife, our stepmom, to leave us the inheritance. Needless to say, I feel he is incredible naive.
Twenty or so years could pass before she dies, as she is 10 years younger than him, and I feel that we will grow apart over that time. We aren’t particularly close now. I fear we will get nothing.
Also see: Avoid these painful tax issues when settling a loved one’s estate
1. What does the law say about inheritance? Does she get half while my brother and I split the other half?
2. If he does leave her the money and house, can he specify in the will that we are to get them when she dies?
3. What stops her from giving them to her family when she is still alive?
4. If I could talk my dad into forming a trust, what kind would allow him to give her money to live on (within limits), guarantee that she doesn’t hand the money out to her family, and give her temporary possession of the house (until she dies), while guaranteeing that my brother and I get what is left upon her death?
Circling the Wagons
Dear Circling,
I understand that you feel like your father should leave you a sum of money and/or his home when he dies. But two decades is a long time to be together, and your stepmother — as she is now — likely makes your father very happy. True love rarely runs smoothly, of course, especially when there is a large inheritance at stake and a blended family to spar over it. Of course, it’s your father’s money: He earned it, and he can leave $1.9 million to the local rescue pound for dogs if he wants, and the other $100,000 to a home for sick and indigent cats.
Assuming he does want to divide his estate so his wife and two children each get a slice of the pie, it’s important to raise the issue with him now. It’s a delicate issue — any suggestion that his wife will keep all the money for herself would likely put him on the defensive and may even make him think that you care more about the money than you do about her. In other words, you want to be realistic, but not too blunt; a wrong move could push him into a rash decision in which he tells you to sing for your $2 million supper. But you could make suggestions, which brings me to your four questions.
If there is no will, how much you and your brother get all depends on where you live. In New York, your stepmother would inherit the first $50,000 plus half of the balance (around $1 million), and you and your brother would inherit $500,000 each. But your father does have a will, so I assume he has made provisions for your and your brother, as well as for his wife. The amount you get depends on his last will and testament. He might leave the entire estate to his wife, or he may make her a tenant for life, meaning you and your brother would inherit the house when he dies.
If he leaves her everything, there is nothing stopping your stepmother from leaving your father’s estate to charity or to someone else in her family. Of course, it would be nice if she decided to keep you both in her thoughts, but there are no guarantees. An estate-planning attorney could best advise your father, but an irrevocable trust would be the best way to ensure that your father’s wife and his children abide by his wishes. He could also set up an education trust fund to help pay for your or your children’s college expenses.
Good luck with the conversation — and, if you spend more time with your stepmother, she might even happily surprise you.
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