Parents, Step-Parents And Children, Oh My! Blended Families + Death = A Potential Nightmare
Anyone who’s seen an episode of “Modern Family” knows that families these days come in many different shapes and sizes. Long gone are the days when a “family” was defined as a mother, father, and two children (or was it 2.5 children? Where does the .5 come from anyway?). In this article, we’ll focus on one of the types of families that is common in our modern culture: the blended family.
The Unique Dynamics At Play in Blended Families
A “blended family” comes into being when parents divorce, and at least one remarries. While everyone may get along effortlessly while the parent is alive, that too often doesn’t happen once the parent dies. Why? Because the law still hasn’t caught up to our modern definition of “family.” The law often favors the spouse, which works well when the spouse and the deceased have children together. But when the deceased parent has children from another marriage, the children can - indeed, often are - cut out of their inheritance.
Other than the law being slow to catch up, there are a few more reasons why this happens:
The parent trusts the new spouse completely and can’t comprehend the spouse ever doing anything to harm the children;
The new spouse may place his or her interest ahead of the children - or have children from a first marriage and want them to benefit instead; or
The parent has not been educated about what could happen when he or she dies and hasn’t consulted with a competent attorney to get educated.
A True (and Common) Story That Became a Nightmare
In a recent marketwatch.com article, a woman wrote about her nightmare scenario. Her father (we’ll call him “Dad”) owned several properties, including the house she lived in as a child. He remarried, and when his health started to decline, her stepmother (we’ll call her “Stepmom”) made financial moves so he could qualify for government healthcare benefits under the Medicaid program. Whereas Medicaid is a needs-based program (meaning, you only qualify if you can’t afford to pay), many people with means can take advantage of legal maneuvers and set their assets aside so they qualify. Doing this keeps assets protected for the next generation(s).
So far, so good. It seems as if Stepmom has the children’s interests at heart, right? Not so fast.
To qualify for Medicaid, Dad had to transfer his assets to someone else while he was alive. That “someone else” was Stepmom. She convinced Dad it was the right move and that she could be trusted with his properties. Dad eventually died, and so at the time of his death, Stepmom owned all his properties, including the childhood home. Stepmom went on a selling spree, cashing in on them all. And guess where the money went? If you guessed Stepmom and HER daughter, you’d be right. Dad’s children from his first marriage got nothing.
Wait - Surely That’s Not Legal!
You may be thinking that’s a horribly unfair outcome - so bad that it has to be illegal. But it’s not. It’s completely legal. Once Stepmom owned the properties, she was free to do anything she wanted with them. She chose - deliberately – to give her stepchildren none of the proceeds and under the law, she had the absolute right to do this. The children had no recourse. They’d lose in court every day of the week - and twice on Sundays.
And so we’re left to wonder: is this the outcome Dad wanted? Could he have foreseen Stepmom was capable of cutting out his children? And did he know there was another way he could have protected them and still qualified for government benefits? With education from a trusted lawyer, would he have done anything differently?
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