Dear Penny: My Husband Died. Do Our Kids Get His Would-Be Inheritance?
I had two children with my husband who died. Will our children be entitled to any of his would-be inheritance? I do not want anything, but would want my children to receive anything they may be entitled to. There was a family trust set up, but I never had access to what it said. I was told that the portion that would have gone to my late husband would go to his children, but I’m unsure.
— Trusting mother
Dear Trusting,
I spoke with an estate planning attorney, Ciara Lister, the co-founder of the firm Legado, to suss out the legal issues in your question.
“The short answer is that it depends on how the trust was written,” Lister said. “It’s frustrating to be left in the dark, but the best thing you can do is start asking questions.”
To know exactly what your children might be entitled to, you’ll need to learn a few more details about the trust. Here are the questions Lister recommends asking:
- Who is the trustee? Start here, because this is the person who manages the trust and distributes assets. They could give you a copy of the trust document, answer your questions or direct you to the attorney who created the trust. If they can’t give you clear answers, contact a local estate planning attorney to help you access and review the trust document.
- In what state was the trust created? State laws govern who has access to a trust, and that could determine your or your children’s right to review the trust details.
- Who are the beneficiaries? These are the people who receive assets. Ask whether your husband was a beneficiary, whether your children were beneficiaries and/or whether your husband’s share would go to his children. If the trust uses a per stirpes rule for your husband’s share, it would automatically go to his children. If it uses a per capita rule, his share would instead be split among other listed beneficiaries, “meaning your kids might not inherit anything,” Lister explained. If your children are listed as beneficiaries or contingent beneficiaries under their father, they have a right to review the trust details.
- Is it revocable or irrevocable? Revocable means it can be changed over time; irrevocable means it cannot. If your children weren’t originally listed as beneficiaries, you might be able to work with the family to alter a revocable trust to add them.
- What are the details of the trust? Which assets are in the trust, how will they be distributed and are there any restrictions on inheritance (e.g. timelines or conditions beneficiaries have to meet)?
Depending on your relationship to the family members who set up the trust, getting this information could take some legwork. But, Lister said, “As soon as you get a copy of the trust itself, a lot of your questions will be answered.”Dana Miranda is a Certified Educator in Personal Finance® and author of YOU DON’T NEED A BUDGET. She writes Healthy Rich, a newsletter about how capitalism impacts the ways we think, teach and talk about money.
