Joe meets the woman of his dreams, and wants to get married or move in with her. His children from the first marriage come over and want to talk to him about his girlfriend.
Here’s Joe: I really don’t feel like getting into this conversation with my son and daughter, again. We’ve been through this countless times, them saying that my girlfriend is not right for me, that I can do better, that she is only after my money, et cetera. They hate her for no good reason. But no matter how unpleasant these conversations are, they are my still children. I value their opinion more than anyone’s, and I care about their feelings as well. I know that no matter their age, it’s a hard adjustment for them. And who knows, they might even be right to an extent. I can see how I am biased about this relationship, love makes people see things differently. But still, I would have preferred to be left alone on this. Oh well, here comes nothing…
My daughter plunges right in. “Dad, we’re concerned,” she says. “We think that the woman you’re moving in with does not have your best interest in mind.”
Of course they think that. I wince and say “I know that you guys don’t like my girlfriend, but I’m sure that you also know that this is not the most comfortable topic for me to talk about.” I try to switch topics: “Let’s talk about something else, like how are the grandkids doing? Where are you guys going for vacation?”
But the kids know me well and they ignore this tactic. “Dad, we want to talk about our concerns with your girlfriend, my daughter continues. “You’re too biased to see it, but everyone knows that she is taking advantage of you. You just have to trust us on this.”
Looks like this is going to be one of those conversations where I have to squirm while the kids play righteous. But I don’t want to hurt their feelings so I acknowledge them. “I understand that you guys are concerned, but your should not worry about me, I can take care of myself.”
They think briefly and reply, “we know that you can take care of yourself, but how about protecting your assets?”
“Protecting my assets from what?” I incredulously ask.
My daughter replies, “from all kinds of things. What if your girlfriend is not as sincere as you think she is, what if we’re right? You need to protect your family. Besides, there are papers you can sign that provide protection from all kinds of things, such as creditors and the IRS, and help you save money on taxes and qualify for Medicaid. This will really be a good thing for everyone.”
Reluctantly, I ask “what are we talking about here exactly”?
My son enthusiastically replies, “we spoke to lawyer Bob, and he explained to us that there is this document called a trust, and it provides all of these protections for our family.”
Not understanding this at all, I take a shot in the dark: “And how would that work?”
My son quickly replies: “We’ll I’ll take care of all that for you. I’ll have lawyer Bob prepare the papers to sign, all you have to do is show up and sign them.”
I mull this over in my mind and ask the natural question, “What’s going to happen to, my money, investments and real estate?”
My son has a ready answer for me, “I think it will pretty much be the same as it was, but with the added benefit of having all this protection.”
I think it over some more, and answer slowly “protection sounds like a good thing, I’ll definitely give it some thought.”
The children talk about it with me some more and get me to commit to a meeting with Lawyer Bob. We then move on to some pleasant topics and have a good time. The next day, I do some research on the internet regarding documents that supposedly provide “protection” from the second wife and creditors and supposedly help a person save money on taxes and qualify for Medicaid. I come upon some articles by New York estate lawyer Albert Goodwin and decided to give him a call to and ask him to help me figure all this out.
Albert Goodwin meets me in his office. “What brings you in today?” he asks.
I explain my situation to the estate attorney: “I met this woman and I’m in love with her, and I would like to move in together. My children are suggesting that I sign some papers with lawyer Bob, and he says that it will protect the assets from the woman that I am dating and even from creditors, and it will help save money on taxes too. Do you think that’s a good idea? Should I sign the papers?”
The attorney points out, “It’s your life and I can’t make a decision for you, but what I would like to do is to point out some concerns that I would have if I were you. “
“What kind of concerns?” I ask.
Mr. Goodwin explains, “The way this whole situation is unfolding looks very suspicious. Let’s talk about it one step at a time.”
“Ok…” I say.
He asks me, “Is it you who is initiating this transaction or is it your children”
“That’s a good question,” I say.
He presses on, “So is this trust something that they want or something that you want?”
“It’s more like something that they want, I didn’t even consider doing a trust until they brought it up.”
“Do you and the children always want the same thing?” He continues.
I give him a puzzled look.
He goes on, “For example, in case of the woman you are with, do you and the children want the same thing?”
I get what he’s saying now. “Not at all,” I answer, “my children would have preferred that me and their mom were still together. They are not comfortable with my girlfriend, they think that she is trying to take their mother’s place and that she doesn’t really love me but is just using me for my money, which is completely ridiculous.”
“It figures,” he continues. “I have anther question to ask you. Do your children think that they can make better financial decisions than you, with your money, when it comes to whether to spend money in a way that your girlfriend will benefit or give money to them or their children (your grandchildren), or save up your money “for your retirement” so that the money will eventually pass to them as their inheritance?”
I respond, “I’m sure that they do think that they know better than me what to do with my money.”
He asks another question, “Would you really want to sign a document that take away your ability to make financial decisions? To have your children make financial decisions for you?”
This got me really concerned. “Of course not,” I say, “But that’s not what this document is, my children told me it’s just to protect my assets from my girlfriend.”
“And what do you think “protect” means?” he asks.
“I know what it means”, I say even though I’m not even sure at this point, “It means to keep something safe. I assume it’s something positive. Protection seems like a good thing to have.”
“Depends who the protection is from” he replies. “In a situation like yours, I often see that “protection” is a misleading word used to restrict you from using your own money.”
I can’t believe my ears. “But how could that happen?” I almost scream. “It’s my money, not theirs. How can they control it?”
He explains, “When you sign a trust, you also sign documents that transfer your assets to the trust. So whether it’s money, investments or real estate, it will be transferred to the trust. And if the trust says that you don’t control the money and assets, than that is what is going to happen. You would essentially sign your money and assets away.”
“That does not sound good.” I say. It really doesn’t. “But it would still be my trust, right?”
He seems poised to deliver more bad news about these kinds of trusts. “I’ve seen some of these trusts belong to the owner in name only. What is likely to happen here is the trust will be controlled by your children. You will not be able to spend the money, so that the money is preserved for them and your grandchildren. This is what they means by “protection.” Not protection from your girlfriend, creditors, or taxes. Protection from you.”
This is just too much. “What makes you think my children would do such a thing?” I say in panic.
He explains further. “Children sometimes try to do this when their dad is with someone other than their mom. It’s because they hate the new woman in your life. They will do everything they can to make her life miserable. And they are willing to inflict maximum pain on you in the process. Also, they often do everything they can to make sure that your money goes to what they consider “your real family” – themselves, their kids, sometimes their siblings, even their mom, your first wife. They view the new girlfriend and her children as impostors, and think that you are crazy and that they can make better decisions than you can. Why that is, I don’t know. That’s just how it is. So it’s good to take precautions.”
“Like what?” I ask.
He explains, “Before signing any documents your children want you to sign, show them to an estate attorney. An attorney will explain what you are really signing, and tell you exactly what property rights you are giving up. Or better yet, don’t sign anything they give you. Tell them you can get your own lawyer.”
This is actually not a bad idea. But there’s another thing I want to know. “What is the worst case scenario here?”
He explains the worst case scenario to me. “The trusts that I’ve seen children have their parents sign are essentially transfers of the parents’ property to the children. You will have no decision-making power on your investments or real estate. Want to sell an investment property and buy a retirement home in Florida for your and your girlfriend? Have to ask your children to do it, you will have no power to do it on your own. Want to go on a cruise or to on a trip to Europe with your girlfriend? Ask your children. You would have to ask your children every time you need money. What do you think their answer is going to be? Do you think they want you to go to Europe with your girlfriend.”
That’s a lot to think about.
Don’t just sign any documents your kids give you, no matter how well-meaning you think they are. Get your own wills, trusts and estates lawyer. Tell your lawyer your goals, express your concerns and follow their advise. Have your own New York trust lawyer draw up the documents you want, if you need any at all. If you would like to speak with attorney Albert Goodwin, he can be reached at (212) 233-1233.