PROTECTING THE SURVIVING SPOUSE'S INHERITANCE
By: Mina N. Sirkin, Attorney at Law

As the number of non-traditional families increases, there is an increasing need for estate planning to accomplish two tasks: A) To insure that the surviving spouse retains control of the assets; or B) If the surviving spouse is unfamiliar with the day to day financial decision making, that the estate's assets are managed properly to provide him or her with sufficient assets so he or she may live a financially comfortable life after the death of his or her spouse. My reference to a non-traditional family is intended to cover families with second or third marriages, who may or may not have children from any of those marriages.

Concerns of the Surviving Spouse in a Non-Traditional marriage: During my conversations with spouses of second or third marriages, the main focus of the conversation seems to revolve around the issue of retaining the family residence after death of the first spouse to die. Second wives (sometimes husbands) seem to be fearful of being removed from the family residence by the children of the first marriage.

In preparation of a will or a trust, this issue must be specifically addressed. If the house is one that was acquired other than in the current marriage, we must indicate what the rights of the surviving spouse will be as to that residence. Failure to specify can often lead to friction and possibly unnecessary litigation. Loss of a spouse is difficult enough to endure. It is not necessary to add other stresses at this time.

What are the choices? If the property is the separate property of one spouse (that is, acquired before this marriage OR allocated as separate property by a pre or post marital agreement), the owner spouse can name the surviving spouse either as a fee (full) owner of the property upon the owner's death, or leave a life estate to the surviving spouse, allowing him or her to live in the property as long as he or she is alive. If you are leaving a life estate to the surviving spouse, it is preferable to indicate who pays for the repairs, upkeep, improvements, taxes and insurance on the property. Who manages the estate's property after spouse number 1 passes away? In most marriages, one of the spouses takes on the role of financial manager during their marriage. This often means that the other spouse is uninterested or unaware of the day to day financial affairs of the household. This lack of interest or unawareness can become dangerous in a non-traditional family setting. First, a spouse who is unfamiliar with financial management can take unnecessary risks with the estate property, OR because of a lack of knowledge may invest the assets in investments that do not produce sufficient income to support him or her during his or her lifetime. The unnecessary risks can diminish the share of the children of the first and second marriages which could lead to friction between the children and the second spouse.

How to alleviate this problem? Simplify the management of your assets for the surviving spouse. First, this means consolidating the assets into a few investments that the non-managing spouse will easily be able to manage in the event of a death. Secondly, it is a good idea to take an investment management course with both of you as participants of the class. These classes are offered at your local community colleges. Thirdly, if the non-managing spouse is uninterested to manage anything, that task can be delegated to professional money managers who will simply take care of the management of the assets and send the spouse a statement of affairs at the end of each month.

Each estate is different in size and complexity. Therefore, the advice given above may or may not apply to your individual estate. To protect you and your family, individual planning and advice is recommended.

Mina N. Sirkin is a partner at the Law Offices of Sirkin and Sirkin. Sirkin and Sirkin has seven office locations available throughout Los Angeles and Orange counties. Their practice is limited to estate planning (Wills, Trusts and Probate). To reach them by telephone, please call 818. 340. 4479.

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