Divorce presents numerous financial complexities when children are involved, leading to detailed custody plans that spell out monetary arrangements. However, when parents remarry, they often don’t consider the financial repercussions that may result from their new marriage and impact their children. Unfortunately, this kind of oversight can negatively affect stepchildren if the biological parent dies after remarrying, which is what happened with Charles Reinhold’s children.
A New Start Ends Too Soon
Charles divorced from his first wife when he was 38. He and his ex had three children, all under the age of 12. At the time of his divorce, Charles was an engineer with numerous patents that allowed him to live comfortably while still financially providing for his children.He was also an art collector with numerous high-value pieces in his home and held several investment properties.
Charles invested much of his extra income in physical assets that would retain or increase in value. He planned to leave these assets to his children, ensuring they would have financial stability after he died.
Olivia Enters the Picture
Three years after his divorce, Charles married Olivia. She really seemed to connect with his three kids, volunteering to take them on outings, planning birthday parties, and helping them with homework when Charles was unavailable. She hoped that she and Charles would have at least one child, but she always talked about her stepchildren as if they were hers.
Charles Dies Unexpectedly
At 45, Charles died unexpectedly. He didn’t have an estate plan with a will or trust. As California residents, when Charles died, Olivia inherited several properties, most of the art pieces, the money in all their bank accounts, and his retirement and investment accounts because the state considers those assets community properties. Though the children receive one-third of their dad’s separate property, most of his assets were now part of the estate he shared with Olivia.
The Surviving Spouse Stakes Her Claim
Charles thought he had years to figure out how to divvy his assets among his heirs. He wanted to wait until after he and Olivia had a child of their own so that he could include their child in his will. He would never have dreamed that his new wife would deny his three kids an inheritance.
However, that’s precisely what happened. Charles’s ex-wife hired an attorney to advocate for her children, only to discover that there was nothing to be done. The law sided with Olivia, and the children would only receive two-thirds of the assets the state considered Charles’s separate holdings, which were a fraction of the entire estate.
Charles Could Have Provided for His Children
An estate plan would have prevented this financial devastation. At AmeriEstate, we recommend our clients establish new wills and trusts as soon as they remarry. A living trust would have ensured his children received a share of the joint estate while still providing for Olivia until and unless she remarried.
If you have children from a previous marriage, don’t take their future for granted. Protect their financial security with estate planning from AmeriEstate. Feel free to contact us with questions and for a free consultation.