Trusts and Inheritance

Dear Len & Rosie,

My husband is a beneficiary of his mother's trust. He will not receive his share outright. Instead, she is leaving him his share in a trust that continues until his death. Then, the trust goes to our children, leaving me nothing. I have been with my husband for 38 years and some of my husbands siblings have been married as many as four times. I don't understand why she is treating me this way. Is this legal?

Louise

Dear Louise,

A fundamental rule of law is that blood is thicker than water. Most of the time, parents do not make any provision in their wills or trusts for their sons and daughters-in-law. There are, of course, happy exceptions to this rule and one would hope that your mother-in-law would reward your 38 years of fidelity by cutting you in for a share if your husband dies. But that's her decision to make.

There are many reasons why your mother-in-law wouldn't want to leave assets to your husband outright. Depending on how wealthy she is, and how wealthy you and your husband are, it may make sense to leave assets in a trust that will pay out to the grandchildren so that her assets will not be hit with an estate tax double-whammy - being subject to estate tax both on her death and on her son's death.

Or maybe your mother-in-law doesn't want to look down from heaven and see a son or daughter-in-law driving a Lexus that she bought and paid for. Keep in mind two things. First, your mother-in-law does have the right to do what she wants with her assets. She doesn't have to leave anything to an in-law, despite the length of your marriage. The bottom line is that your mother-in-law doesn't have to be fair about it. Second, if your mother-in-law were to die without a will or trust, and your husband was already deceased, then your husband's share would pass to his children by default. You would still get nothing.

Maybe your mother-in-law is treating you the same as her other in-laws because she does not want to be perceived as unfair. We do not recommend that you outright ask her to cut you in for your husband's share. That could make her angry enough to disinherit your husband outright. If your husband agrees with you, what he ought to do is to speak to his mother about his concerns for your financial security after his death, and maybe he'll be able to convince his mother to let you benefit from the income earned by the trust until your death, after which everything would still to go her grandchildren.

Len & Rosie

Len Tillem and Rosie McNichol are elder law attorneys. Contact them at 846 Broadway, Sonoma, CA 95476, by phone at (707) 996-4505, or on the Internet at www.lentillem.com. Len also answers legal questions each weekday, 3-4PM on Newstalk910AM.