Your Estate … with James Ward: The surviving spouse and their heirs often aren’t properly protected

Have you created an estate plan to follow your wishes no matter what the order of death?

By James Ward

James Ward

Couples often think they’ll both die at the same time, but that’s a rare occurrence. When they’re close to each other in age, they frequently assume they’ll go close to each other in death. When there’s a large age difference, they frequently think they clearly know which spouse will pass first. But often, what they think will happen doesn’t. Life throws a curveball.

Statistics can give us the odds of something happening, but what if your case plays out differently? What if the idea of dying about the same time, or the idea of the order of death, doesn’t prove to be true in your case?

I’ve seen cases where the couple wasn’t married, then one dies and the house passes to the children of the deceased person, and then they evict the surviving partner because there were no documents to protect that person. Likewise, what if they’re married and the wife owned the house and wants it to go to her children upon her death? If the wife dies first and the husband isn’t properly protected, the children of the wife can evict the husband. Where does he go then? I’ve seen it happen. What if the husband was already incapacitated at the time his wife died and she was caring for him? Where does he go then?

These are all real issues that need to be contemplated when putting together a good estate plan. Assumptions that don’t pan out can be devastating for the survivors and/or the heirs.

In one case, the husband was very close to death, but the wife was working full time and very active even though she had just been diagnosed with cancer. They were adamant that the husband was near death and would die in a few weeks, so I had to move quickly to get the estate plan put in place. They were not even willing to consider that the wife would die first. The husband was estranged from his children, and the wife had one daughter who would eventually inherit it all after the second death.

What happened? The husband turned the corner and got better, the wife died quickly, and the husband’s children, upon seeing his new wealth, suddenly decided that they love him and will take care of him and help him spend his money. Shocking, but not.

The husband had almost died a few times and physically looked extremely ill, so I didn’t resist when they refused to discuss the possibility of the wife dying first. In hindsight, I should have pushed harder to have them consider the reverse order of death from what they predicted, but they were absolutely against discussing that possibility.

When considering your own family, how can you protect both spouses or partners, and also protect the designated heirs of each?

In one case that came to me, the wife had died first, and the home and all the couple’s wealth had belonged to her. Everything passed to her two daughters, but they allowed their stepfather to remain in the house until he could no longer live alone, and then they were generously using the inheritance they received from their mother to pay for their stepfather’s expenses at an assisted living facility.

That’s something we don’t see often. The daughters got along fine and were respecting their mother’s non-binding wishes to use their inherited money to provide care for their stepfather.

Think about your own situation. Have you created an estate plan to follow your wishes no matter what the order of death? What if you don’t die about the same time and one lives for 20 years after the first one dies? These are important things to ponder.