After the divorce or death of a parent, the family may grow and reshape like an amoeba as the parents re-marry, bring existing kids into the mix and create more offspring. Their children grow up and may marry, have their own kids, and the family tree gets ever more complex.
HuffPost Divorce has a “Blended Family Friday” series that profiles successful amalgamations where the parents offer advice about how to make it work.
What about when it all goes wrong?
On a rainy afternoon in a Philadelphia suburb, Marilyn told me her story about how her close extended family was ripped apart in an unimaginable way.
This attractive woman is sixty-five but looks a good ten years younger. She is petite, fit and has a soft glow about her, despite the fact that she suffered a traumatic financial event in the not-so-distant past.
It was a second marriage for both Geoffrey and Marilyn, and each had adult children from their prior marriages. Marilyn had a close relationship with his two kids, Gavin and Gail. They frequently celebrated holidays and family events.
“I don’t want to dwell on death and dying.”
A few years after they wed, Geoffrey told Marilyn that he needed to update his will.
There’s the first mistake: he should have taken care of this business earlier.
Geoffrey had signed his will 10 years ago and left everything to Gavin and Gail (their mother had passed away). Geoffrey now wanted to provide for his wife Marilyn. They had not signed a prenuptial agreement.
That’s another mistake, but that’s the topic for another post.
Geoffrey wasn’t satisfied with Henry, his former lawyer, so he looked for a new one to update his will and prepare Marilyn’s first will. However, it was one of those chores that always got pushed aside.
That’s something a lot of us do, right? It’s a Grown Up task that just keeps falling further down the to-do list. If it’s even on our list at all.
If you haven’t already read it, please see my post at Credit.com, “In a Coma and Going Broke” which graphically shows why you need to take care of end-of-life business even though it may be unpleasant.
Marilyn avoided these discussions with Geoffrey, pleading, “Can’t we talk about this another time? I don’t want to dwell on death and dying.”
Geoffrey and Marilyn were about to travel to Brazil for two weeks, and in Geoffrey’s eyes, the new wills became a matter of urgency. The task moved up higher on his list, along with getting typhoid fever shots. He and Marilyn made several appointments with a potential attorney, but they never signed any papers.
The couple returned safely from their Brazilian vacation.
Geoffrey was in good health, so it was a horrific shock when he found out at his annual check-up that he had pancreatic cancer. In the car from the doctor’s office to the hospital, Geoffrey panicked about not having an up-to-date will, and he begged Marilyn to find a lawyer immediately. Marilyn was still stunned by the news of Geoffrey’s terminal illness. Practical considerations were the last thing on her mind.
Geoffrey died five days later.
Who gets the money?
Marilyn was clueless about their household expenses, debts, assets, and investments. She knew of course that she wasn’t named in Geoffrey’s will. His two children inherited the entire estate, which was worth about $150,000. Geoffrey had designated Marilyn as the sole beneficiary of his small pension. In addition, before they married, he named her as a 10% beneficiary of his IRA. Gavin and Gail were each 45% beneficiaries. The IRA was worth more than $500,000 and represented most of Geoffrey’s assets. So in total, not much money for Marilyn.
Gavin and Gail were shocked when they found out that Geoffrey had failed to update his will and his IRA when he married their stepmother.
The kids reassured Marilyn’s family, her children, and their close friends that they were well aware of their father’s errors and “they would take care of Marilyn,” she told me. Gail, who was especially close to Marilyn, told her more than once that “just because Dad didn’t do the right thing, doesn’t mean we can’t do something to fix it.”
Let’s make a family deal
Marilyn proposed that she, Gavin, and Gail each receive one third of the proceeds of the $500,000 IRA. This was a generous offer; she could have claimed fifty percent. But Gavin and Gail rejected this proposal and they made no counter-offer. In Marilyn’s words, when each sibling saw that their own $225,000 payout could be reduced to $166,000, “they scurried up to the plate and took their share, like little rats.”
Gavin, Gail, and their respective spouses were all successful working professionals, so it wasn’t as if they were destitute, she told me.
The kids suggested that Marilyn make a budget of her income and living expenses. Fortunately, Geoffrey always kept meticulous records. Marilyn admits that she was ignorant about financial matters in general; she had been willing to learn and Geoffrey wanted to teach her, but she kept putting it off. It was too late now.
Marilyn received wages from her part-time job, modest income from her investments, and Geoffrey’s small pension. However, she couldn’t maintain her current lifestyle on that income, even though she was generally frugal.
What happened to the happily blended family?
Gavin and Gail reviewed her budget, and a few weeks later they informed Marilyn that they were not going to help her. At all. Her slice of the IRA pie would remain a paltry ten percent – just $50,000 – and she would get none of the assets in Geoffrey’s estate.
Marilyn couldn’t believe it. She thought that when Gavin and Gail asked her to prepare the budget, they intended to share the wealth. However, when her stepchildren saw they would legally inherit all of their father’s assets plus the vast majority of the IRA, they changed their story entirely. They wanted all to go exactly in accordance with Geoffrey’s outdated and unintentional plans.
Any notion of “taking care of Marilyn” fell by the wayside. Gavin told Marilyn that his father “knew what he was doing, and he was very wise not to have revised his will. He had no intention of doing anything for you.”
Marilyn retorted, “Gavin, you obviously didn’t inherit your father’s genes for decency. Greed is more important to you.”
Gail snapped at her, “We don’t know what your problem is, Marilyn. You’re a wealthy woman. You’re certainly living above the poverty level!”
What she got
Under the state laws where Geoffrey lived, even though his will did not name Marilyn, she was legally entitled to half of Geoffrey’s estate of $150,000, which amounted to $75,000. The bulk of his wealth was in the IRA, which was distributed strictly according to his designations, so Marilyn got only $50,000 as her 10% share. However, her total inheritance of $125,000 was diminished by $25,000 — which was the amount that Marilyn spent on her attorney’s fees to protect her legal rights.
One hundred thousand dollars may seem like a lot of money to you, and you may wonder what Marilyn was complaining about. But everything is “relative,” and she got a pitiful share compared to what her relatives got. And more importantly, Geoffrey’s final wishes were not fulfilled.
Just when you thought it couldn’t get any uglier
There was another family twist that made matters worse. Geoffrey’s will was drafted by Henry, an attorney who was an old family friend. Remember why Geoffrey was looking for a new lawyer? It was because he wasn’t satisfied with Henry.
Geoffrey named his kids as executors of his will so they were free to choose the probate attorney. Gavin and Gail picked Henry, despite the fact that he had limited relevant experience. Why?
Henry’s son was married to Geoffrey’s daughter, Gail. Get the picture?
Except for Marilyn – who had no legal rights to pick an executor – they all chose to ignore the obvious conflict of interest. Henry could not be objective because his daughter-in-law Gail was a primary beneficiary of Geoffrey’s estate. Of course he would want to see that Gail got as much money as possible. Henry had no reason to do anything to benefit Marilyn, who was discarded as part of the blended family.
Can we still be family?
Marilyn got blindsided when her extended family legally claimed assets that were clearly intended for her. For a while, Gail tried to maintain contact with Marilyn despite everything that happened. But Marilyn was not interested. “I felt they had betrayed me, so I had nothing to say to them,” she explained.
The happily blended family became pulverized. All because of greed. Is this a graphic lesson about why you should have a will, power of attorney, and other end-of-life documents that reflect your current wishes? You bet it is.
Due to this experience, Marilyn signed a will and a power of attorney. Other people tell her similar stories and she understands that her situation was not unique. Marilyn takes some personal responsibility for what happened:
People said Geoffrey did the wrong thing, but I was equally guilty. I put it off. You have to learn by these mistakes. Life has gone on for me although I miss him terribly. It could have been handled so much better but there was a lack of communication plus ignorance on my part.
Marilyn lost hundreds of thousands of dollars. But the more tragic result was the destruction of her healthy family relationships.
Beware the blender with its sharp blades.
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