Can I just Give Assets to my Kids, Even After I remarry?
September 1, 2020 | View PDF
There are several facets to your question so the answer will be a bit broad. There are ways to transfer assets now such as those financial accounts in your name. Your new spouse probably doesn’t want to add your child if he runs a risk of losing assets. You can add your kids with right of survivorship. Of course that gives them the same rights and liability regarding your accounts. You can also set up a POD (Payable on Death) for bank accounts or TOD (Transfer on Death) for investment accounts or simply name them as beneficiaries. The POD and TOD transfer on death to the named individual by showing up with a death certificate.
If you own a vehicle by yourself, you can add a child to the title, but you will want the word “or” between the names. If you still reside in the home that you occupied when your husband died, I would guess it reads “with right of survivorship,” in which case it automatically passed to you at the moment of his death. If you probated his estate, you may have transferred the home solely to you at that time. In that case, if you want to transfer the home to your child, you have a few options. The first possibility is a Last Will and Testament. The Will is generally not very expensive to do, though probate can be a few thousand dollars for legal, court, maybe bond and other statutory costs. The home can be transferred via a Personal Representative’s deed provided the bills are paid. The second possibility is a new deed adding your child or children via “rights of survivorship.” Another may be a Deed Reserving a Life Estate where the individual has rights to the property until their death, then transfers to those that hold a remainder interest. Another possibility may be a trust that holds assets including the deed, etc with beneficiaries.
So there are several ways to transfer assets before death, at the moment of death or post mortem. Sounds like a plethora of choices, nothing can go wrong, right? Well, several things can go wrong. If you end up requiring Medicaid for long-term care within five years, there would be a time-based penalty by Medicaid and application rejection due to the gifting of assets when not receiving fair market value. An example may be such as giving away money or the home. At this writing, a deed reserving a life estate carries no value after five years. Or you give away a home and/or money and the beneficiary is sued or files bankruptcy, then “your” assets become available to the plaintiff or creditors in a bankruptcy. Or in giving away assets, the new husband ends up having no home or inadequate assets to care for himself upon your death.
While dependents are entitled to certain exempt assets and maybe more when there is no Will, the spouse may well be entitled to an elective share.
Children are not necessarily entitled to anything under your Will, but your spouse is.
Under Code of Alabama 43-8-70 it reads: (a) If a married person domiciled in this state dies, the surviving spouse has a right of election to take an elective share of the estate. The elective share shall be the lesser of: (1) All of the estate of the deceased reduced by the value of the surviving spouse’s separate estate; or (2) One-third of the estate of the deceased (b) The “separate estate” of the surviving spouse shall include: 1. All property which immediately after the death of the decedent is owned by the spouse outright or in fee simple absolute; 2. All legal and equitable interests in property the possession or enjoyment of which are acquired only by surviving the decedent; and 3. All income and other beneficial interests: a. Under a trust; b. In proceeds of insurance on the life of the decedent; and c. Under any broad-based nondiscriminatory pension, profit-sharing, stock bonus, deferred compensation, disability, death benefit or other such plan established by an employer. (c) If a married person not domiciled in this state dies, the right, if any, of the surviving spouse to take an elective share in property in this state is governed by the law of the decedent’s domicile at death. (Acts 1982, No. 82-399, §2-201.)
The elective share is available if the spouse has not adequately taken care of them in their Will or taken care of them in some adequate way outside of the Will. As you can see it can be a significant portion of the deceased spouse’s estate. You may feel more of a commitment to your children from your prior spouse especially if the latter marriage is more at an advanced age; but your spouse still has significant rights.
Think before you leap and have a really good conversation with your lawyer to consider legal and moral obligations.
This article is informative only and not meant to be all inclusive. Additionally this article does not serve as legal advice to the reader and does not constitute an attorney- client relationship. The reader should seek counsel from their attorney should any questions exist.”No representation is made that the quality of legal services performed is greater than the quality of legal services performed by other lawyers.”