Protecting Children From Prior Relationships

For clients in a second (or third, or fourth) marriage with children from a prior relationship, please make sure to understand this.

Leaving everything to a surviving spouse does not mean it will reach your children from before the marriage.

I see this assumption constantly. A client with children from a prior relationship leaves their entire estate to their current spouse, fully expecting that when the surviving spouse eventually dies, those children will inherit their share. It is a reasonable assumption. It is also wrong.

Once assets pass to a surviving spouse outright, those assets belong to that spouse entirely. They can leave them to whoever they choose. A new partner. Their own children. A charity. There is no legal obligation to pass anything to the deceased spouse's children, regardless of what anyone intended.

By the time the first spouse's children realize this, it is too late.

The solution is not to distrust a surviving spouse. Most of the time, the surviving spouse has every intention of doing right by their stepchildren. The problem is that life happens. People remarry. Relationships change. Assets get commingled. Unfortunately, good intentions do not hold up in Probate Court.

The tool we most commonly recommend in this situation is a Marital Trust, often referred to as a QTIP trust. A Marital or QTIP trust allows the first spouse to provide for the surviving spouse during his or her lifetime, typically through income from the trust, while preserving the underlying assets for the children from the prior relationship when the surviving spouse eventually passes. The surviving spouse is taken care of. The children are protected. And the first spouse's wishes are actually carried out.

It is one of the most important conversations we have with clients in blended families, and one of the most commonly skipped.