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Mary Owens: Estate planning from the heart

Mary Owens

In last month’s article, I discussed the need for clarity regarding the rules that allow a second marriage non-owner surviving spouse to stay in the home after the death of the owner. The common loving practice of allowing the grief-stricken surviving spouse to stay in the home they love and enjoyed sweet memories gives them both emotional and financial security. This living allowance honors the relationship of the decedent with the surviving spouse. It is important this bond is respected.

There are several major considerations that need to be evaluated before any provisions in the trust document are drafted with the requisite language outlining the rights of the spouse that has been left alone.

Does the surviving spouse have the financial ability to pay for the costs of the home while living there? The costs should include the house payment, property taxes, homeowner’s dues, insurance, yard upkeep, interior maintenance and major repairs as they arise.

Could the financial ability of the surviving spouse change significantly where the costs of caring for the home are no longer affordable?

Does the surviving spouse have the physical ability to live in the house alone safely? Items to consider are ill health, difficult cancer treatments, dementia or Alzheimer’s disease, and limited mobility in a wheel chair or walker. All these life challenges need to be taken into consideration when drafting language regarding the rights of a surviving spouse to continue living in the decedent’s home. A person who is not mentally competent to live alone can harm themselves and the decedent’s home without any intention of misconduct.

Have the terms of expected standard of care regarding home maintenance been clearly delineated and agreed upon by the surviving spouse? The agreement must come down to detailed terms like pet care, yard maintenance, internal cleanliness, drug use or propagation issues, roommates, and annual home inspections with a professional to determine needed and neglected repairs. Clarity is always the best policy. The trustee of the estate is responsible for making sure the home is well cared for and not damaged by its occupant.

If most of the answers to these questions are no, then provisions of occupancy must be carefully thought out or other solutions considered.

The most frequent problem is the surviving spouse simply cannot afford to stay in the home and pay all the related bills. If that is the case, consider allowing them to stay in the home up to two years after the death of the decedent by leaving funds in the trust to pay the overhead of the house during this deep mourning period. Asking a spouse to pack up and move with little time to consider where they want to live all while dealing with the immediacy of their loved one’s death is cruel. Let them accept and adjust to their tremendous loss. Let them savor the memories they had in the home with their loved one. Let them emotionally recover.

If the surviving spouse does not have the mental capacity to stay in the house, the choices of resolution can be deeply challenging. Engaging the family of the remaining, but clearly unwell, surviving spouse is important early in the process of drafting provisions. They need to be apprised of the potential needed aide to their family member if the owner decedent unexpectedly passes away. This is not a pleasant subject, but avoiding it only makes matters worse.

In a second marriage, the children of the decedent or successor trustee of the owner decedent of the house usually have no legal powers to assist a surviving spouse. If the surviving spouse is unable to care for themselves or it is expected they may be unable to care for themselves in the future, the resolution to this very difficult issue can only be dealt with effectively if open and honest communication occurs well in advance of the crisis of the owner decedent passing away. If the owner decedent is financially able to leave the surviving spouse an adequate sum for their care, so much the better. The viable solutions expand significantly, and the desired outcomes can usually be figured out well in advance. If the decedent spouse cannot afford to pay for the surviving spouse’s occupancy costs out of the estate, leaving a house for the surviving spouse to live in, but cannot afford, only makes a very difficult situation even more complicated and emotionally challenging. A potential solution is selling the home and putting a portion of the proceeds into a trust for their care.

Even if the surviving spouse can afford to maintain the home in an acceptable standard of care after the death of the decedent owner, it is important for the language to be extremely clear regarding the standard of care expectations and the need to ascertain the surviving spouse has the mental capacity to safely live there. Life is full of challenges and changes. Don’t assume the circumstances that exist when the agreement is consummated will be the same circumstances that will exist later after the trust language was drafted. Life can change quickly and unexpectedly, and forethought is important. Drafting language regarding the right to inspect the home regularly and requiring a social worker to assess the surviving spouse’s ability to live safely in the home is questionable.

The common theme to finding solutions is to respect the love between the surviving spouse and the owner decedent. There was a reason the decedent wanted their loved one to have the ability to stay in the home. Above all, respect that loving relationship of the past. It is the honorable thing to do.

Mary Owens, Principal/Branch Manager, RJFS, 426 Sutton Way, Suite 110, Grass Valley, CA 95945, 530-272-7500. Securities offered through Raymond James Financial Services, Inc., Member FINRA/SIPC.


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