Will dad be displaced by stepkids?

Dear Len & Rosie,

My 74-year-old stepmother has been diagnosed with terminal kidney cancer and is expected to die within two years. Her will provides that her home and other assets be sold and distributed 50-50, half to her kids and half to my father. Is this legal and enforceable? I'm afraid that my father will be displaced and lose his home and his independence when she dies.

Maria

Dear Maria,

Your stepmother has the right to leave her assets to anyone she wants upon her death. She is under no legal obligation to leave anything to your father at all.

Many people in second marriages want to make sure that their children from prior marriages do not lose their inheritance. Over the years, we’ve heard many widows say that their late husband’s children never respected them, or the stepchildren were being greedy, or a stepchild was asking too many questions about the will or trust.

If your stepmother dies first and your father inherits everything, then he could very well disinherit her children. This is probably what she was thinking when she made her will.

But it may not work out the way she wants. When your stepmother dies, her will shall apply only to her probate estate, which consists of assets titled in her name alone, in tenancy in common with others, or in community property (but not community property with right of survivorship) with your father.

If the home is titled in joint tenancy with your father, he’ll own it and any other joint tenancy assets outright upon his wife’s death, no matter what her will says. He’ll also inherit everything left to him by beneficiary designation.

But that’s leaving it all to chance. A joint tenancy can be severed (converted into a tenancy in common) anytime before the death of either joint tenant.

Your step-mother can do this by herself without the consent of your father, as long as the deed is recorded before her death. Or, if she signs the deed severing the joint tenancy within three days before her death, her children can record it within seven days after her death.

The best way of dealing with this problem is for your father and his wife to communicate with one another about what each of them want.

They should also meet with an estate planning attorney to review their existing estate plans. There are many possible solutions that will allow the surviving spouse to stay in the family home and receive the benefit of both spouses’ assets while protecting the inheritance rights of the deceased spouse’s children.

For example, your stepmother can give your father a life estate in her half of the home and pass the remainder interest on to her children. Or she could have her half of the home held in a trust for your father’s benefit.

The two of them together could even enter into a written contract promising to leave everything to one another on the first death and then to both families equally on the second death.

Don’t forget that your stepmother is ultimately in control of her own assets.

She does not have to create a trust with your father, and may still want to leave everything to her children upon her death.

Brush up on your sales skills and try to persuade her that allowing your father to live in the home until his death is a good thing for her to do, and that she can do this while still protecting her own children’s inheritance.

Len & Rosie