How do I protect my children's inheritance from my husband's or wife's NEXT spouse?
We all should remember the 90-plus-year-old man in Houston, J. Howard Marshall, who wanted to change his will and trust to exclude his own children in favor of benefiting a 30-plus-year-old woman (and her child/children) whom he met after his wife had died. It just so happens that the younger woman was Anna Nicole Smith, a noted Texas stripper and former Playboy Playmate of the Year.
The man's children were in their 60s, and they strenuously objected to this alteration of a joint trust executed by their father and mother before the mother's death. A provision in the trust stated it was amendable even after the first spouse died, so that any necessary changes to the trust's terms could be made by the surviving spouse.
The solution for avoiding such situations is to have the trust read that it is amendable even after the first spouse dies, EXCEPT in the case of the dispositive provisions thereof (who gets what from the trust). Therefore, what was the joint plan of both parents cannot be altered by the surviving spouse alone to benefit anyone except the persons jointly agreed upon when the trust was executed by both. All of the other provisions of the trust could still be amended as needed.
Note that Oklahoma also has a statute that allows any trust to be amended by the current maker(s) and ALL beneficiaries (including contingent beneficiaries thereof). So, the jointly agreed upon beneficiaries can be protected while maintaining flexibility in all other trust matters, and if all beneficiaries join in to amend the trust, it can still be amended.
Grayson P. Van Horn is an attorney at law serving Oklahoma residents and property owners.
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