Monday, September 19, 2016

Have Children from a Prior Relationship and You Don't Have a Will? Why That's a Bad Idea....


If you are currently married and have children from a prior relationship or marriage, you should have an estate plan! 


Why?

If you were to die, without a will, Texas law will decide who gets what, and in what amount. And that can be bad.

Understand this: if you have children from outside your current marriage, and you die without a will, your children from your prior relationship/marriage will inherit certain amounts of your property. That is Texas law.

But they may not inherit exactly what you would want them to inherit.

And all of this could come as a surprise to your current spouse. It may also create a hardship for your current spouse, who is relying on the property you own to make ends meet after you are gone.

Specifically,  your children from a prior relationship will inherit 2/3 of your separate personal property, your 1/2 interest in the community property you own with your current spouse, and the "remainder" of your real estate. (as a practical matter this means that your spouse gets to use your home for his/her life but then it goes to your children. It also means that your children will inherit some of the "community property" which your spouse may think of as his/hers).

If you have a family who knows each other well and has each other's best interests at heart, this may not be a problem.  BUT, if they have an uncertain or outright antagonistic situation, this could be a huge problem.    If your children are adults, there could be hurt feelings or even worse, a court battle which eats up the assets.  If your children are minors, then you will leave your current spouse in an uncomfortable position of having to deal with your ex to defend property which your current spouse already considers to be his/hers while grieving your loss. If your ex is still bitter over your breakup that is even worse!

Planning a will in a step-family situation is often an emotionally-charged issue which is avoided or met with dread.

It requires careful balancing between different interests.  How much, if anything, should your children receive? How much does your spouse need? Should all of your separate property go to your children? Are there any pieces of property which are part of a family legacy that your children should have?  Is some of your property technically "separate" but without the help of your current spouse it would not have the value it has today?

If there is a family business involved and various family members are relying on the income it can be even more tricky and require some additional business planning as well.

An experienced attorney who understands all of these issues can help guide you on a clear path.  And that's good!


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