As our San Diego trust attorney knows, almost everyone has this thought once in awhile, “How Do I Make Sure My Husband Doesn’t Marry Some Tramp and Leave All of My Money to Her Instead of My Kids?”
And, while most people are thinking of intentional disinheritance when they ask this question, children get unintentionally disinherited every day because property is owned jointly or is passed by beneficiary designation. This almost guarantees disinheritance in second and third marriages.
For example, Jack and Jill are happily married with three children (Jim, Jane, and Jeremy.) As do most married couples, Jack and Jane own most of their assets jointly.
This means that they own their house, bank accounts, and investments accounts jointly. Their other assets such as retirement accounts and life insurance have a beneficiary designation and Jack and Jill have named each other as beneficiaries.
The family goes to the beach and Jack is eaten by a shark in Mission Bay. Jill, by operation of law, inherits all of the jointly owned assets. By contract, she inherits the retirement accounts and life insurance. Through Jack’s will, she inherits his car and tangible personal property.
A year or so later, Jill marries Greg. Greg has one daughter, Ginger.
Because she is used to owning everything jointly with her spouse, she puts all of her assets in joint names with Greg. Without thinking it through, she names Greg as the beneficiary of her retirement plans and life insurance policies.
Jill and Greg go to dinner in La Jolla and Jill falls off a cliff and is killed.
What do Jack and Jill’s children inherit? (Hint: They did not consult with a San Diego trust attorney!)
NOT MUCH! Maybe they inherit Jill’s car and personal property if that’s what her will says. Jill’s will doesn’t control most of her assets.
All of the assets jointly owned with Greg or naming Greg as a beneficiary go to Greg. Jack and Jill’s three children get none of it.
What do they inherit when Greg dies?
Everything will go to Greg’s daughter, Ginger. So, all of the money that Jack and Jill worked so hard for ends up with Greg and, then, his daughter, Ginger.
This is how children are unintentionally disinherited all of the time. If you want to avoid unintentionally disinheriting your children, call our San Diego trust attorney for a consultation. We can also show you how to avoid intentional disinheritance (with trust planning) if that is of concern.