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Don’t Leave It All to Your Spouse
http://www.countywomanmagazines.com/articles/373/1/Dont-Leave-It-All-to-Your-Spouse/Page1.html
Ric Edelman

 
By Ric Edelman
Published on April 1, 2011
 
It’s so common that estate attorneys call it the “I Love You” Will. If you die, you leave everything to your spouse; in the event your spouse dies first, you leave it all to your children. But this simple strategy could lead to unexpected problems for the simple reason that life isn’t always so simple.

It’s so common that estate attorneys call it the “I Love You” Will. If you die, you leave everything to your spouse; in the event your spouse dies first, you leave it all to your children. But this simple strategy could lead to unexpected problems for the simple reason that life isn’t always so simple.

Consider: Richard and Ashley have two children. Richard dies, leaving everything to Ashley. Ashley then marries Tom, a widower with three children of his own. Ashley dies, leaving everything to Tom. When Tom dies, he leaves everything to his three kids. Result: Richard and Ashley’s kids get nothing.

Consider: At Raul’s death, he leaves $1 million to each of his children; Jackie, aged 22, Ginger, 25, and Harold, 27. The daughters seek professional advice, but within three years, Harold is broke and he begins to ask his sisters for money.

Each of these problems was caused by “I Love You” wills. Here are better solutions: Richard and Ashley should have left their money to a trust, not to each other. The trust could provide income for as long as the surviving spouse lives, but upon that second spouse’s death, any unspent money would remain in the trust for the benefit of the children. This way, there’s less risk that the assets would leave the family.

Raul could have left each child’s inheritance to a trust, stipulating how and when money would be distributed to each child. This type of “spendthrift” trust is useful when leaving money to heirs who might not handle it responsibly.

These are just two examples that demonstrate why simple wills are usually not the best idea. If it’s been a few years since you’ve reviewed your estate plan, talk with your financial or legal advisor today. Remember: When it comes to estate planning, you might not have a tomorrow.

The following is excerpted from Ric Edelman’s Inside Personal Finance. Copyright ©2011. Reprinted with permission. All rights reserved. Ric Edelman is a nationally acclaimed financial advisor, bestselling author and talk show host and has been providing financial advice to consumers for 25 years. His firm has won more than 75 financial, business, community and philanthropic awards, and currently manages $6 billion for more than 14,000 clients nationwide. For more about personal finance, visit Ric online at RicEdelman.com. The ideas expressed in this article are solely the opinion of the author, and do not express or imply endorsement of any individual, organization or product. Ric Edelman is Chairman and CEO of Edelman Financial Services LLC. He is also President of Sanders Morris Harris Group and a member of its Board of Directors, and an Investment Advisor Representative who offers advisory services through EFS, an SEC-registered Investment Advisor. Ric is also a Registered Principal of and offers securities through Sanders Morris Harris Inc., an
affiliated broker/dealer, member FINRA/SIPC.