Changing wills and inheritance after divorce and remarriage. Who will you leave your money and property to?
How do you change your will and inheritance to fit your new extended family?
Much of the wealth is held by those 55 and older as you can see in the graph below. Much of this wealth may be held in assets such as a house. For most people, this wealth represents a considerable investment of their working life earnings. Many have children and grandchildren and have thought about how to divide this wealth among their relatives and family.
Adapted from Table 4. Percent Distribution of Household Net Worth, by Amount of Net Worth and Selected Characteristics: 2000
Source: U.S. Census Bureau, Housing and Household Economic Statistics Division
Many of those 55 and older have also had a divorce. Now along with children, grandchildren, former spouse or spouses, they may also have a new spouse and step-children. The definition of family has changed and this leads to new and interesting questions about how to divide wealth among this new extended family.
Historically wills were a way to protect the family estate especially for the children. Blood relatives have long been recognized as the rightful heirs to their family wealth along with the spouse. These were usually known as family. This social view has been reflected in inheritance law and continues to be the default rule.
Given the high rate of divorce and the even higher rate of remarriage, this redefines the concept of family. The family no longer is just the core nuclear family of blood relatives but can include others that are not genetically related.
Has this changed our beliefs regarding wills and inheritance?
A variety of studies have shown that genetic relationships, keeping in touch, closeness and a good quality relationship are things people use when thinking about proper division of wealth among family. A study in the Journal of Family and Economics Issues 1998 on this subject identified three factors as being important: genetic ties, patriarchal lineage (male line) and broadly defined family ties.
Obligations to blood relatives were seen as most important but some included their daughter in law in the will even after she was divorced from their son. Most of those also considered her part of the family even after she remarried.
It seems that our definition of family is changing and with that may come an increasing change in our beliefs on who should inherit our money. As this changes, it may well begin to influence lawmakers and change inheritance law at some point in the future.