Many commentators have focused on the divorce rate in the United States in debating parent-child relationships and similar issues in the public forum. However, divorce is not always the end of the story. Many individuals remarry after a divorce. Similarly, widows and widowers often find new partners, creating a significant number of blended families in Ohio and throughout the country.
Blended Families Are Highly Common
In fact, half of our country’s 60 million children under the age of 13 live with a stepparent or partner of one biological parent, according to The Step Family Foundation. Unfortunately, even for individuals who have created an estate plan, disputes among family members, or between a family member and the personal representative, can often erupt after the person passes away — and in a blended family, the reasons for dispute may be more plentiful.
Well-known author Tom Clancy, who wrote such great stories such as The Hunt for Red October and Red Storm Rising, took great strides to write an estate plan (although he likely did not write the plan himself). His plan included three trusts. One trust was intended to benefit of his second spouse. A second trust was created to provide for his second wife and the couple’s minor child. A third was intended to benefit the author’s children from his first marriage.
The author created documents to explain that the second and third trusts should split the estate taxes so that they remained equal in net value. With everything covered, all seemed well and good. However, at some point the author created a codicil (a document to modify an existing part will) to allow the second trust qualify for the marital deduction. Unfortunately, the new document apparently did not also address the tax issue. That became the basis for dispute during administration of the author’s estate after he passed away.
Estate Tax Bill Important In Creating The Dispute
Estate taxes amounted to nearly $16 million dollars without the marital exemption and the personal representative sought to split the bill equally between the second and third trust as originally planned. However, Alexandra, the author’s second wife thought that idea would defeat the purpose of the codicil. Tax payments due not qualify for the exemption, diluting the benefit of the codicil. She argued that the third trust should cover the entirety of the outstanding tax debt, which amounted to $11.8 million when factoring in the exemption created by the codicil.
The courts looked at the original will and the codicil together and determined that Mr. Clancy would have wanted the entire plan to pay lower estate taxes, leaving the author’s children from the previous marriage with all of the tax burden -and reducing the relative value of their share of the estate (the second and third trusts were intended to have equal value and an equal tax burden prior to the codicil).
Wills and trusts contests can have complex issues. When blended families are involved, there may often be disputes between step-siblings or step-children and the step-parents. Working with a focused probate litigation attorney can make a significant difference in the outcome of a dispute.