A common theme in blended families

Dear Len & Rosie,

I have been married to my husband for ten years, but we lived together for at thirteen years before marrying. My husband has children and grandchildren from a previous marriage. He has all of his financial accounts in his name only, and our home is in a trust in his name only. He refuses to add my name to the deed. The trust is revocable, but I will get to “use” the home until I die, and then his heirs inherit. Under the circumstances, is any of his property community property? Or will I be left with nothing when he’s no longer living? I wonder if I would be more secure divorced than married financially, since I worry that his children will contest any thing that my husband leaves me in a trust or will.

Susan

Dear Susan,

This is a common theme in blended families when either or both spouses have children from a prior relationship. Your husband fears that if he dies first, you’ll get everything, and it’ll wind up staying in your family instead of passing to his children and grandchildren. So, his trust was drafted to provide you with a place to live for the rest of your life, and perhaps income on some of his investments - we’d have to review his trust to be sure.

Is there any community property? Maybe. Community property is defined as assets either of you acquire during the marriage, except as a result of a gift or inheritance. Everything your husband owned ten years ago before your marriage is separate property owned by him and him alone. If he wasn’t retired by then, his earnings after the date of your marriage is community property half owned by you, and so is whatever he purchased with his employment income.

Even if the home is in his name alone, you own a partial community property interest in it, if he’s been using community property income to pay the mortgage. This doesn’t mean the entire property is community property; only the portion actually purchased with community property is. Keep in mind that if the two of you signed a prenuptial agreement, then all bets are off. If you did, you may have agreed that his income would remain his separate property.

Assuming you don’t get fed up and divorce him because of his reluctance to provide for you in a manner sufficient for your needs after his death, you may be able to assert that you own part of his trust because it’s community property. But you have to be careful. His estate plan could include a “forced election” by which you would have to choose between your community property rights and your lifetime right to occupy his home together with whatever else he leaves you.

What you ought to do now is to try to talk to him gently about what you’re going to need to provide for yourself after his death. You’ve been together for twenty-three years, so there’s a good chance he’ll listen as long as you acknowledge his need to provide for his descendants.

Len & Rosie

List of Eleven Plus 1

Dear Readers,

We would like to share with you something that we share with each of our trust clients. It’s really important, our clients like it, and we think that your family can benefit from it as well. You may have seen this in the column before. We print it year after year. Consider it as a gentle reminder to get yourself organized. One of the most tedious tasks in administering a trust or an estate is finding the decedent’s estate planning documents and asset information. Frequently, children or even spouses have no idea where important documents are to be found.

After you pass away, the last thing you should want is for your loved ones to have to search through your belongings to find your will, stock certificates, or other important papers. They shouldn’t have to lift up your mattress to look for your safe deposit box key. They shouldn’t have to wait a month for new account statements to come in the mail so they can figure out where you invested your savings.

To avoid these difficulties, you should organize your personal and financial data. This is where the list comes in. Collect the information described in this list and give a copy to your children or close relatives, or keep it somewhere safe and let your family know where to find it. In case something happens to you, the List of Eleven is one of the best ways to ensure that your relatives can find all your vital records.

    The List of Eleven Plus One

1. The location of your safe deposit box, if you have one, and the location of you’re the key.

2. Account numbers for all of your insurance policies, health, life, auto, home, burial, etc., and the names and addresses of your insurance agents.

3. A list of your stocks, bonds, mutual funds, and the name, address and phone number of your broker.

4. The names of the banks or savings and loans for each of your accounts, and the account numbers, or even copies of account statements.

5. The location of your cemetery plot or mausoleum niche.

6. The location of your will or trust and the name of your attorney.

7. Your credit card numbers.

8. Your Social Security Number.

9. The name and address of your mortgage lender, the account number, and the approximate amount of the outstanding debt.

10. The name and address of your accountant, and where your past income tax returns are located.

11. The type of memorial or funeral service you want.

11+1.  These days, many people receive account statements and pay their bills online, leaving no paper trail at home. It’s important for your loved ones to be able to access your email and online accounts so they can wrap things up when you are gone. You may want to provide them with a list of your account numbers and passwords.

 If you think this is too hard to do yourself, consider how hard it will be for your children to deal with after you pass away. Take a few minutes to get organized.