Wednesday, August 27, 2014
Large age gaps between spouses can present unique estate planning issues. The recent coverage of actress Lauren Bacall’s death has highlighted her marriage to Humphrey Bogart, who was twenty-five years her senior. The couple had two young children, and “Bogie,” passed away in 1957 from esophageal cancer. Bacall’s loss of her husband points to some of the issues surviving spouses face when there is an age difference between spouses. “In these marriages there is a strong statistical likelihood that one spouse will survive the other by many years, or even decades . . . when the husband is the older spouse, the estate planning concerns are even more pronounced as women tend to live longer than men. Also, in some cases women pull back on their career path to raise children—particularly if the man is older and the higher earner.” If proper planning and communication is not in place, resentments can ensue.
The best estate plans are ones that do not shy away from difficult issues that not only affect the surviving spouse, but also take the surviving children into consideration. In many instances, these children are from different marriages and could be close in age to the new younger spouse. This can create crosscurrents and drama in the extended spouse, particularly in terms of what will happen with the estate.
While there is no cookie-cutter way to configure an estate, an effective tool is a QTIP Trust. This allows the surviving spouse to set aside assets in trust while she is alive, but then pass them to the children of the older spouse at her later death. If enough assets exist, trusts for children can be created and funded while the older spouse is still alive.
See Annika Ferris Cushnie, Bogie and Bacall: Iconic May-December Romance, Market Watch, Aug. 27, 2014.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.