Picture this: At Thanksgiving, you have your eye on that last piece of pie. You can practically taste it. As you reach for it, someone else grabs it and there’s a tug of war. Do you share it? Does one of you give up and find another dessert? Does someone intervene and decide for you? Are you in a family that will laugh this off? Or is there some drama?
When the stakes are high and there’s money and property involved, the resulting conflict is enough to ruin anyone’s appetite.
Picture this: You’re in a blended family where there’s Mom, Step-Dad, and Mom’s kids from her first marriage. Mom dies without a Will. Step-Dad is distraught, but takes comfort in knowing that the house is almost paid off. There’s about $200,000 of equity. Mom always meant to put Step-Dad on the deed, but never got around to it. Unfortunately for Step-Dad, the “default setting” that is set by Florida law is for him to only inherit half of his wife’s estate. The step-kids inherit the other half.
Step-Dad has 3 options if he wants to keep living in the home.
Option 1: Take a life estate in the home and at his death, the house goes to the step-kids.
Option 2: Take a one half undivided interest in the home as a tenant in common with the step-kids. (The step-kids could force a sale if they wanted to.)
Option 3: Buy out the step-kids’ half share.
Everyone’s upset and relationships are strained. Will the step-kids sign over their interest to Step-Dad for free? Will it take $100,000 to buy out the step-kids? With a thoughtful estate plan, this blended family could have avoided this mess and saved $100,000, plus court costs and lawyers’ fees.