Estates & Wills & Trusts

Estate planning after a second marriage

By AdvocateDaily.com Staff

In the first instalment of a two-part series, Winnipeg wills and estate lawyer Cynthia Hiebert-Simkin explores estate planning for second marriages.

It’s one thing to want your kids to have the proceeds of your estate after you’re gone, but whether it actually happens is another thing entirely, says Winnipeg wills and estate lawyer Cynthia Hiebert-Simkin.

If a second marriage adds stepchildren, the situation becomes even more complicated, says Hiebert-Simkin, a partner with Tradition Law LLP, Estates and Trusts.

Therefore, a proper estate plan becomes crucial, she tells AdvocateDaily.com.

And that plan needs to be communicated to both the spouse and the children involved, says Hiebert-Simkin.

“It’s so critical in second-marriage situations, from an estate planning perspective, to actually sit down, figure out what you want to do and make sure you have the proper documents to facilitate that upon your passing,” she says.

Hiebert-Simkin points out that clients have testamentary freedom and the ability to write their documents, but that freedom might be constrained by legislation or ownership issues. In Manitoba, where she practises, the Family Property Act says claims against the estate can only be brought by the spouse.

For those in second marriages to be secure in the knowledge that their estate is divided the way they truly want, they need to seriously consider what would happen if they were to die today and their spouse survives them, says Hiebert-Simkin.

A common approach is for the couple to leave everything to each other upon the death of the first. Then, when the second one dies, everything is divided among the kids. The problem, says Hiebert-Simkin, is that the first spouse can’t dictate what the second one puts in their will after they’re gone.

“It seems very simple and it sounds great. But you have to trust that the other person, when you die, isn’t going to change their will to leave everything to their own children. Nothing is binding. There is nothing written to say this is going to happen,” she says.

“If you’re only relying on trust and good intentions, your own children may be left out. We often see that.”

Without specific instructions and something to back up that plan, things might easily break down, says Hiebert-Simkin, particularly if the relationship between the surviving spouse and the stepchildren isn’t good or deteriorates.

One option, she says, is to sue the step-parent, although that only prolongs the grieving and can be costly.

"Plus, they might not have standing to sue," says Hiebert-Simkin. "If there's nothing in writing between the spouses about the estate plan and each gives everything to their own children, there might not be the opportunity to sue."

She says the child "might have standing if there was an estate plan agreement or mutual will and the step-parent did something contrary to it."

Hiebert-Simkin suggests the couple explore their options, such as looking at an estate planning agreement, mutual wills or a spousal trust and ensure the kids know about it.

“There’s that natural reticence between parents and children where parents don’t want to talk about their financial affairs — yet it can be so important,” she says.

“I’ve had people in my office crying: ‘I had a good relationship with my stepmother but when I asked for my mother's recipes, she threw them away.’”

Stay tuned for Part 2, where Hiebert-Simkin discusses how to provide for children when there’s a second marriage.

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