estate planning blended families Archives - The Law Office of Barbara E. Cashman

Southern Colorado Springtime

So this is part five of my series and just in time for next Saturday’s Jefferson County Senior Law Day (June 4, 2016)! I took a couple weeks off for a vacation, but I’m back now. Here’s a link to a bit more information about this year’s program which will again be held at Colorado Christian University in Lakewood. I don’t yet have a link to the 2016 Senior Law Handbook, but will provide it when it becomes available.

For the last couple years of Senior Law Day, I have presented on financial powers of attorney and conservatorships, but this year I was approached about presenting on a new and different topic, hence the title of the “Yours, Mine, Ours and Theirs” presentation – which will be its first time out. I don’t know how many people will show up for my presentation, because the title is purposely short. . . I’ll be presenting it at 11:30 and will have informational flyers available for attendees.

So here’s an overview along with some of the questions that folks “re-coupling” in later life might want to ask themselves and discuss with each other. This discussion, a most necessary and valuable conversation when had at a time that is planned – and not in the midst of a crisis or emergency, can clarify expectations and prevent conflict in a number of important ways by managing expectations. So, let’s look at where we find ourselves. . . .

Remarriage or Re-Coupling After Widowhood

I use the term “re-coupling” to encompass marital, non-marital (living together), and other types of relationships which people forge with their partner or other dear ones. Just as a bit of a refresher, while the “yours, mine and ours” may seem fairly straightforward, figuring out which property will be maintained or held separately and how joint property will be titled and maintained, particularly in the event of disability and death, is usually a bit of a challenge. Remember that I have added “Theirs” at the end of the title to reflect the fact that many of us in these re-couplings have children from previous relationships. In my experience with estate planning for blended families or later life re-marriages, there is often a strong desire to address and adequately or equitably provide for adult children of the respective spouses or partners. In some cases, spouses will leave everything to the survivor of the two, with the option for the survivor to leave something or nothing to that first to die spouse’s children. Others, including those re-coupled spouses who were previously widowed, may feel that their children should inherit at least some portion of their (the remarried widowed spouse’s) estate after the re-coupled spouse passes away because some portion of that estate may have been accumulated by the adult child’s first-to-die other parent. It is not uncommon for a re-coupled spouse or partner to feel that their adult child(ren) ought to have a stake in their inheritance. This expectation is often expressed by the child(ren) as well.

Many of these couples, particularly those who are already receiving retirement benefits when the re-coupling occurs, must carefully consider the impact (sometimes an adverse financial impact) that marriage has on the benefits received as a result of being widowed. For this reason, some older couples may choose to have a non-marital or living together agreement in place, so that these matters are more clearly elucidated.

Remarriage or Re-coupling After Divorce

Remarriage after divorce presents its own financial challenges as the number of baby boomers (many of whom were in long-term marriages of twenty or thirty years) divorcing has been on the rise. There may be a splitting of retirement benefits (as in a qualified domestic relations order – QDRO) or other splitting up of retirement assets of a qualified or nonqualified nature.

Remarriage or Re-coupling and Disability Planning

Yes, this is the other “d” which is very important and should not be overlooked! While death is an uncertain certainty, whether we will suffer some form of disability – physical, cognitive, psychological – is a certain uncertainty. In my opinion, re-coupled folks or remarried spouses need to have these questions sorted out more clearly than those who are single or only married once. Why? The best way to minimize the potential for conflict in the event of a health crisis is to make a plan which identifies key people and describes their roles, such as:

Who will be the health care agent or proxy decision maker?
How will the spouse or partner be empowered to make health care decisions?
How will the adult child or children of a disabled or incapacitated parent be empowered to make health care decisions?
What will be the process for communication between all the persons involved?

Another question deserves its own paragraph, but I will simply mention the question here – have you examined your expectations around care and caregiving for your spouse or partner? Alright, this post is getting a bit long-winded here, so I will wrap up with just a few more questions, which I will no doubt be putting into that flyer for Senior Law Day.

Have you both considered the level of financial stress relative to the longevity (actual and potential) of your relationship? I will close with a few bullet points to ponder:

What do you need to know about your own and your partner’s finances before you tie the knot or otherwise intertwine your finances?

How much debt do you have? What kind is it (credit card, car loan, other)?
How will we handle financial or other interventions or assistance for an adult child?
What do you earn now and what will you have as income sources for retirement (pensions, 401(k), IRA, Social Security, etc.)?
How will you and your partner share or split expenses?
Do you and your partner have compatible financial values and goals?
Would you consider a marital agreement, written plan or a will (or will substitute) to provide more clarity about rights, expectations and so on in the event of disability and eventual death?

I am looking forward to presenting on this topic of “Yours, Mine, Ours and Theirs” which is a most interesting topic to me, based on the experience that each blended family or recoupled relationship is utterly unique.

Late Summer Blooms

Here’s another article about a bill making its way through the Colorado legislature. If the title sounds obscure, it’s because it’s designed to address a rather tragic situation which infrequently occurs but has terrible repercussions. A “protected person” in this context is a person known as a ward in a guardianship proceeding, one who is incapacitated and who has a guardian appointed to make decisions on the protected person’s behalf because they are unable to make decisions and otherwise manage their own affairs.

Here’s a link to the bill, SB 16-026. The bill is more popularly known as the “Peter Falk” bill because it concerns the late actor’s daughter, Catherine Falk, and her efforts to promote legislation that would make it easier for children of protected persons (like those under a guardianship) to challenge the monopolization or limitation by a guardian upon access to the protected person by the protected person’s family members. The tragic scenario in the Peter Falk case was that Peter Falk suffered from dementia in his final years and his wife, Catherine Falk’s stepmother, was estranged from Peter Falk’s daughter. Falk’s wife prevented Falk’s daughter from visiting her father and so she took her battle – an expensive one – to court in California. Catherine Falk later organized her own effort to ensure that this type of scenario would not happen again, not just in the state where her father resided, but she made it a nationwide effort. Visit her website here, which shows the ten states whose legislatures are currently considering the legislation.

If you think this kind of scenario would only play out for a celebrity, well . . . think again! A large proportion of us, particularly us baby boomers, are in second marriages or otherwise part of a blended family – with all of its particular and unique personal dynamics. According to this study by the Pew Center, remarriage is on the rise for Americans aged 55 and older.

I do estate planning for many blended families. While many of the shrinking number of “Ward and June Cleaver” families (long marriage, children in common) would not consider this type of scenario to be likely to occur, as the baby boomers and our core complicated familial arrangements get on in years and continue to change, the Peter Falk bill presents an opportunity to curb restrictions which a guardian may place on who may visit and interact with “their ward.” I have a hunch that more of us in my line of work are likely to encounter this difficult and sad scenario.

As we continue to live longer and grapple with more encroachments on our capacity – in the form of dementia and other physical, cognitive and psychological challenges, we will likely confront these difficult issues more frequently. The debate about limitations on guardianships – of rights retained by an incapacitated ward, as well as the limitations on the authority of the guardian – are difficult issues with which people and courts must certainly grapple.

I will close with an observation from a favorite poet.

The great secret of death, and perhaps its deepest connection with us is this:

In taking from us a being we have loved and venerated,

death does not wound us without, at the same time, lifting us

toward a more perfect understanding of this being and of ourselves.

—Rainer Maria Rilke, Letter to Countess Margot Sizzo-Noris-Crouty, January 23, 1924

Tag Archives: estate planning blended families

Yours, Mine, Ours and Theirs: Some Practical Questions to Get Started

The Colorado bill on Personal Rights of Protected Persons