A fictitious Seattle couple in their 50s, Joe and Mary, are enjoying a successful second marriage for each of them. They’ve been married for five years. Before meeting Mary, Joe was married to Jane. Joe and Jane had three children, who are now adults, and a fully paid-for house in Seattle. When their marriage ended, Joe received the house as part of his share of their joint property when Joe and Mary divided their assets. After Joe and Jane dated for a few years, and two years prior to their wedding, Jane moved into the house. Like many couples, Joe and Mary never entered into a cohabitation agreement or pre-nuptial agreement and never worked with an estate planning attorney to develop a comprehensive estate plan.
One morning Joe left the house to practice with his soccer team and, tragically, suffered a heart attack on the field and died. Mary grieved, having lost of the love of her life. But little did she know what was in store for her.
Joe’s three adult children proceeded to retain an attorney. Their attorney correctly stated that, since Joe didn’t have a Will, the laws of intestate succession applied. Pursuant to RCW 11.04.015, Mary was entitled to receive all of Joe’s community property and one half of his separate property. What exactly constituted the community versus separate property in their five-year marriage? And, do those two years of cohabitation count as a “committed intimate relationship,” so that a type of community property ownership occurred that period as well? Without an estate plan, or even a pre-nuptial agreement, in place, these types of issues can generate complex, unpleasant, and expensive legal disputes. And these legal disputes may well be resolved in a way that is quite different than what Joe would have wanted.
For example, in this instance, the house was Joe’s separate property. Joe acquired it before he met Mary. And, like all other homes in Seattle, its value has greatly escalated. A valuation on the home indicates that its current market value is $983,732. In order for Mary to keep her home of seven years, she needs to be able to pay Joe’s three adult children half of the value, as required by RCW 11.04.015. If she’s unable to do so, then the house must be sold and the proceeds split – half to Mary and the remaining half to the three adult children. This reality places considerable financial stress upon Mary, at a time when she continues to grieve for the loss of her mate. Is this what Joe would have wanted? Probably not. But, with no pre-nuptial planning or estate planning in place, an unexpected death can create unexpected chaos in the life of the surviving partner.
The solution? The results in this scenario may have been quite different if Joe and Mary had entered into a pre-nuptial agreement clearly defining their separate and community property assets, and followed that up after their marriage with well-crafted estate planning documents that set forth their desires. The prenuptial agreement would have clearly defined the community versus separate assets, and Joe’s Will could have indicated that, upon his death, Mary would receive the home and its contents. When entering into a new marriage, parties should strongly consider accounting for this life change by consulting both a family law attorney for pre-nuptial work and an estate planning attorney for Wills, powers of attorney, and Health Care Directives. If these steps haven’t been taken, it’s not too late to do so!
Photo credit: U.S. Dept. of Agriculture on Flickr