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March 17, 2021, 3:48 p.m. EDT

My father’s divorce decree says his kids will inherit his house — but he later put it in a trust for his third wife. Which one wins out?

‘My father says he feels very guilty about the entire situation.’

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By Quentin Fottrell, MarketWatch

Dear Quentin,

My father and mother divorced about 40 years ago. My father moved out and purchased a home that is now worth approximately $900,000. The divorce agreement, signed by both parties, called for my father in his will to leave his home to my sister and I.

Fast forward to today, my father (an attorney) has been married to his third wife for almost 30 years. She and her 2 daughters moved into his home soon after they were married. My father is now 85 and has late-stage cancer. He informed me that he has placed his home in an irrevocable trust, with his third wife named as trustee.

His third wife will also receive all of his assets, valued at around $1.5 million, as well as 60% of his annual government pension payments for the remainder of her life. Believe it or not, this pension currently pays my father just over $200,000 annually, so his third wife will receive about $120,000 annually. The government is quite generous to some of its retired workers, and with taxpayers’ money.

My sister and I will split the proceeds from a life-insurance policy valued at approximately $1 million.

‘My father is now 85 and has late-stage cancer.’

The third wife has not been on speaking terms with my sister or I for the past 25 years. Her focus has been on directing my father’s income, assets, and now substantial annual pension payments towards herself, her children, and her grandchildren. For 30 years, my father’s wife has been a materialistic and domineering force who worked hard to turn my father against my sister and I.

She has plenty of her own resources. Ten years ago, the third wife received an inheritance from her father of over $2 million. As they live off of my father’s pension and assets, the third wife’s inheritance from her father was invested and has now grown to $3.5 million. How do I know all of these facts? My father told me. He felt very guilty about the entire situation, and stated he wished he had not done as his third wife demanded.

I have the signed divorce agreement in my possession, and am wondering if, once my father passes, if I were to contest the irrevocable trust, is there a chance that my sister and I would be awarded the house?


Screwed Over, But Not Surprised

<STRONG>You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com</STRONG>

Dear Unsurprised,

There are some things here in your control, and other things that are beyond your control. Identify the latter, and let them go. You risk stewing for years and years, otherwise. Whether your father’s estate is worth $2 million or $20 million, it’s not worth it. Do what you can, and move on.

First off, things you can control. While divorce decrees supercede post-marriage changes in life-insurance beneficiaries that go against such agreements, this situation seems more complex, given that it involves a divorce decree, a last will and testament, and an irrevocable trust.

“This is a very tough issue that depends on the specifics of the trust and the laws of the state,” says divorce attorney Randall Kessler . “But generally a court order takes priority; however, it will take a lot of effort to have the trust set aside as having been violative of the court order.”

“It might be appropriate to consider an attack by the former spouse, who is the other party to the divorce, to return to that court on a claim for contempt which is another way of saying a claim to enforce the court order and its requirement of keeping the money as directed by the court,” he adds.

‘Your father did what he did what he did because he decided to do it. Telling you that he wished he had not done what he did is not fair to you or his wife.’

The Moneyist

If you believe this is worth the legal bills and time, then go for it and, while it’s very possible that you will get the result you want, there is no guarantee that the court will rule in your favor. “People try everything to outsmart or do an end run with divorce decrees,” Kessler adds.

Now to the other stuff. How much Uncle Sam pays government employees in state pensions? Beyond your control.You don’t want to roll the federal government into this family business too. Your stepmother’s net worth independent of your father? Her life, her money, her business.

Your stepmother’s management of your father’s estate? She was married to him for 30 years. Again, that is her prerogative, whether you like it or not, or you believe she is fair or not. Is she focused on dividing this estate equally between your father’s children? No. But it’s your father’s decision.

Let’s be clear: Your father did what he did when he did because he decided to do it. Telling you that he wished he had not done what he did is disingenuous, and not fair to you or his wife. It’s easy to blame his estate planning on a domineering wife and pass the buck so he looks better in your eyes.

People are rarely all good or all bad. We are complicated creatures, and giving yourself the space to feel less anger and more grief over what this money and your father’s decision-making process represents would help you let go of your anger and resentments.

In the meantime, try calling her “his wife” rather than “the third wife.” I understand that you have great feelings of antipathy toward her based on behavior that may or may not have been kind. If you want to lead by example, objectifying her in this way only really hurts you.

The Moneyist: ‘Warren Buffett and Harry Potter couldn’t get those two retired early’: Our spendthrift neighbors said our adviser was ‘lousy.’ So how come WE retired early?

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<STRONG /> By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Quentin Fottrell is MarketWatch's personal-finance editor and The Moneyist columnist for MarketWatch. You can follow him on Twitter @quantanamo.

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