Second marriage

Are you in a second marriage?

All names are changed to protect client identity.

One of our consultants met Mr & Mrs Green recently. Both are in their second marriage and both first marriages ended in divorce. Mr Green has two children (Andrew and Belinda) from his first marriage. They are in their late twenties and had “left home” when Mr & Mrs Green met. Mrs Green has two children from her first marriage (Christopher and Donna). They are in their late teens. They both live at home with Mr & Mrs Green. Mr Green has been very much part of their life as they have grown up. Mr & Mrs Green have a child (Evelyn) together who is now eight years old.

Mr & Mrs Green jointly own a house worth £500,000 with a mortgage that is covered by life insurance. They have almost no savings.

Talking about the distribution of their estate has been very difficult for Mr & Mrs Green because they can never agree on how much each child should receive.

Our consultant set the scene for Mr & Mrs Green by explaining what would happen if they did not make Wills. If Mr Green died first then when Mrs Green died the entire estate would be split between Christopher, Donna and Evelyn. Andrew and Belinda would receive nothing. If Mrs Green died first then when Mr Green died the entire estate would be split between Andrew, Belinda and Evelyn. Christopher and Donna would receive nothing. Mr & Mrs Green both agreed that this was unacceptable and realised that whatever they agreed to for their Wills was better than passing away without Wills.

Quite quickly, Mr & Mrs Green agreed that Evelyn should receive 50%, Christopher and Donna should receive 30% between them and Andrew and Belinda should receive 20% between them. They both realised that this was not a perfect solution but it was much better than what would happen if they did not have Wills.

We have created a special Will for homeowners. When the first of Mr & Mrs Green passes away, “their” half of the family home goes into a trust. The trustees are the surviving spouse and Andrew and Christopher. The trust is flexible so the surviving spouse can move home if needed. However, that 50% of the house is held in trust so that when the surviving spouse passes away, that half can only go to the children as agreed when both Mr & Mrs Green were alive. In other words, it means the surviving spouse cannot change their Will, making that 50% of the family home pass to “their” children.

This solution is extremely popular with our clients who are in second marriages.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here.

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