There is a way to ensure that a surviving spouse won ’ t ever change his or her will after the first spouse ’ s death . This is achieved by signing wills known as mutual wills . news & views SUMMER 2015 | 21
spouse and children , just to find out that some other person — and perhaps a completely different set of children — will reap the benefit instead .
So , if you are concerned about your spouse re-marrying and not leaving the estate to the children , what can you do to avoid that ? While many spouses say that they can ’ t even imagine that happening , they should realize that while it ’ s unimaginable right now while the spouse is alive and they are a family unit , things would be very different without their spouse alive . People do remarry , sometimes quite late in life .
The most commonly used plan is to leave some or all of the estate in a spousal trust that would hold onto the estate for the lifetime of the widowed spouse . A trust like this would allow for money for the spouse to live on , while keeping the capital intact . The widowed spouse could live quite comfortably , but would never have the ability to transfer the estate to anyone . On the death of the widowed spouse , the capital of the trust would be divided among the children . This usually means selling the home that the parents lived in and cashing in investments , RRIFs , and accounts to be divided according to the will that set up the trust .
As a word of caution , it is a good idea to talk to an experienced estate lawyer and possibly an accountant if you want to explore using a trust . You should ensure that you understand the tax consequences to yourself , your estate , and possibly even your children .
Another idea that would ensure that your children inherit from you is to set up your will so that you leave part of your estate directly to your children and part to your spouse . If your children are underage , their shares would be held in trust for them until the age you specify for inheritance . This would mean that only the part of your estate that you give directly to your spouse is at risk to be transferred to anyone who marries your spouse in the future . Whether this is workable will depend in part on whether your estate is large enough to support your widowed spouse if parts of the estate were to be carved off and given to the children .
A further idea is to transfer some assets to your children while you are alive . Doing so , of course , depends on whether you need those assets yourself ; but it is an idea that is workable for some families . Again , make sure you understand any tax consequences before you go ahead . If you own a business that you want to pass to your children one day , rather than relying solely on your will to give your business to your children , get a written succession plan into place while you ’ re alive , and use your will only as a backup to that plan .
As a lawyer , I always encourage people to be very open with me about their concerns , their fears and their goals when we are talking about estate planning . This includes discussing the concern that your children might end up being left out in the cold once you and your spouse have passed away . It ’ s better to bring it up now and try to work out a solution than to leave it as a problem for them to solve once you are gone .
There is a way to ensure that a surviving spouse won ’ t ever change his or her will after the first spouse ’ s death . This is achieved by signing wills known as mutual wills . news & views SUMMER 2015 | 21