Lessons from Cinderella; Estate Planning for Parents of Young Children (Part 5)
June 16, 2015 - Posted by: admin - In category:
Cinderella is a great story, but it is also contains a timeless illustration of the dangers of failing to plan.
First, by way of disclaimer–I do understand that Disney was not attempting to make any sort of statement or teach any lessons in the world of estate planning or financial planning. Even so, what eventually happened to Cinderella (and her wicked stepmother and stepsisters) is not all unusual. Remember it was a series of normal circumstances that led to Cinderella’s fate. First, her mother died when she was young. Then, her father remarried and he died. Cinderella was left with a very unfriendly bunch of step-family members and the stepmother was left with all of the property that was once Cinderella’s parents’ property. But surely such circumstances could never transpire in this manner in real life…right? Wrong.
If you are a parent of young children, you are probably under the age of 60. Though it is not pleasant to consider, if you were to die any time soon, it is VERY likely that your spouse would eventually remarry (after a suitable period of mourning, of course). Following such remarriage, it is entirely possible (actually, there is a 50% chance) that your spouse would die prior to the new spouse. Then, bibidi bobbido boo…(sorry, probably not appropriate for this context…:), the surviving spouse, just like Cinderella’s wicked stepmother, could be left holding and owning ALL of the assets that you and your spouse have worked so hard to acquire and the very same assets that you and your spouse desire to be used for the benefit of your children. Could this really happen? You bet. Is there anything that can be done to prevent your child suffering a fate similar to that of Cinderella (but without the fairly godmother)?
Thankfully, there is actually a great deal you can do to ensure that in no event will your wonderful, beautiful children end up as the real-life example of Cinderella. Among other things, you can ask your estate planning attorney to build proper “remarriage protection” into your estate plan. That means your revocable living trust will have a series of legal protections which will ensure that if you die and if your spouse remarries, such new spouse cannot possibly attain ownership over your assets. Instead, your assets can be irrevocably designated for the benefit of your surviving spouse and for the eventual benefit of your children. While this is a rather simple concept in the legal world, we are surprised and troubled to find that a great many existing estate plans that we encounter do NOTcontain such basic protections. Therefore, it is vital that you ensure such things are in your plan, if you currently have one, or will be in the plan that you are going to get after reading this post.
Just remember the phrase “remarriage protection” and also be sure to tell your estate planning attorney that you do NOTwant your children to end up like Cinderella!!