Minimizing Inheritance Conflict
In this section from his book, “Pankauski’s Probate Litigation: Top 10 Estate Mistakes Revealed”, John Pankauski explains.
It’s all about the money.
Do you have a prenuptial agreement with your present spouse? One might think this makes things easier when you die. I find that, while it definitely gets the legal issues for your estate focused, it still creates work for the probate lawyers.
In the case of a widow who signed a prenup, your estate may have to deal with the issue of creditors’ rights of the surviving spouse. If there’s a prenup, surviving spouses often challenge the validity of that prenup when you die, even when the prenup appears to be clear on its face. Does the prenup call for the widow to waive all guaranteed inheritances and rights to your estate? There could be a change in his or her thinking when you’re gone, or there could be the claim that she or he was “forced” or “coerced” into signing the prenup. This is when “duress” can reign supreme!
In short, she or he may make a claim for a large – or larger – share of your estate than you left for them in your will, trust, or prenup.
Even if the prenup isn’t challenged, consider this: if you promised something to the surviving spouse in your prenup, he or she is now a creditor of your estate and will likely file a “Statement of Claim” (or creditor’s claim) with your probate.
It would be a mistake to believe that your kids might not fight that widow.
Ex-spouses from a divorce? Marital settlement agreements, divorce judgments, and obligations under an order of divorce may, or may not, survive your death.
Yes, your probate estate may need to deal with a prior spouse, even if you re-marry. Why? Because, if you owed a former spouse something under a marital settlement agreement or divorce judgment and it remains outstanding, that ex-spouse is now a creditor of your estate. He or she then needs to file a creditor’s claim (Statement of Claim) to get what he or she is entitled to under the marital settlement agreement or divorce judgment.
Again, don’t be surprised if your adult children want to fight that. The effect of underestimating this “tension” between your latest spouse and your children from a prior relationship can mean a big fat inheritance – for the probate litigators.
Can you possibly avoid this, or minimize this, by tweaking your estate plan in a simple – and, perhaps, inexpensive – way?
Yes you can.
Pankauski’s Bottom Line: understand that while you may love your latest spouse, you kids may not. In fact, consider planning your estate by asking your lawyer how the kids could make your last spouse’s life difficult when you’re gone.
(If you care about those sort of things).