Question: My dad passed away three years ago and mom has met a man she plans to marry. She seems happy but I have some concerns because it will be a second marriage for both. My mom has me, her adult child, and “Stan” has two adult children from his prior marriage. Mom is well off financially; I have no information about Stan’s financial condition. We all get along fine but I am worried! Mom lives in our family home and they plan to live there after the marriage. I hoped the family home would come to me when mom is gone but, with this development, I am not so sure. Is this second marriage a good thing, or just scary?
Answer: You said you all get along “fine,” and that your mom seems happy so I am not clear on why this might be a scary event. Are you hung up on the old saying that some men who marry late in life are looking for “a nurse or a purse?”
If you are concerned about your mom’s “purse,” and, as you say your mom is well off, you could ask her if she plans to enter into a prenuptial agreement before marriage. Given they plan to live in the family home, a prenuptial agreement is advisable and would address how the home is dealt with upon either death or divorce.
If Stan outlives your mom, he could be given a “life estate,” in the home which allows him to stay until his death or until he decides to move out. Alternatively, he could be given a reasonable period of time to move after your mom’s death. It is a discussion they should have.
The “prenup” would be prepared by an attorney and usually both husband and wife have separate legal representation so their rights are fully protected and no conflict of interest occurs. Your mom and Stan will need to fully disclose all assets and liabilities and the agreement will set forth a clear understanding of who gets what on death or divorce. The terms of the prenup would then be incorporated into your mom’s will and trust agreement.
Since you wish to receive and retain the family home on your mom’s passing, this may be a good time to consider something creative about your mom’s estate planning. Given the recent passage of Proposition 19 which will limit the property tax benefits of giving the family home to a child on death, this may be a good time to consider a “gift” of the home to an irrevocable trust. In this way, your mom’s attorney creates an irrevocable trust incorporating any agreement your mom and Stan have regarding the occupancy of the house. The home is then transferred to this new trust. Mom and Stan would pay rent to the trust which in turn pays insurance and property taxes. The trust would make it clear that the property ultimately passes to you.
Remember, taking advantage of the gift to an irrevocable trust must be completed before Feb. 15, so, if your mom is interested in pursuing this planning option, she should contact her attorney immediately. And, be happy for mom! It is not often a senior has a second chance for love.
Liza Horvath has over 30 years’ experience in the estate planning and trust fields and is a Licensed Professional Fiduciary. Liza currently serves as president of Monterey Trust Management. This is not intended to be legal or tax advice. If you have a question, call (831) 646-5262 or email email@example.com
Contributed by local news sources