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The Moneyist: ‘My brother and I have been seeing her darker side’: My father is worth $3 million, but my stepmother only looks out for her own 6 kids. How do I protect my inheritance?

Dear Quentin,

Before my father married, he owned a home and a separate five-acre property that he currently rents out, as well as a small business. After he married my stepmom, they bought the second home that they currently live in. Two years ago, my grandparents passed away leaving my dad a significant inheritance. My dad used the money to pay off the current home and ensure a comfortable retirement for the both of them. Property assets are well over $3 million. Before they married, my stepmom was unemployed and living on welfare (only adding because I’m not sure if it matters). 

My stepmom has really made my dad happy and we’ve become close. However, my brother and I have been seeing her darker side where she is providing a significant amount to her six surviving children and widow of the seventh, while complaining about a 20-year-old truck that my dad gave my brother. My sister-in-law, who provided a significant amount to their finances, was diagnosed with a disease that left her unable to work. 

“‘I have zero doubt that she will do everything she can to ensure her kids inherit everything if my dad passes before she does.’”

My brother, at the time, was barely able to keep up with their mortgage and medical bills. He’s since cut ties with our stepmom, and paid for the truck to reduce tension. My stepmom is a good person, but she’s selfish when it comes to her kids and has been unable to see any similarities between gifting the truck and paying legal fees, house payments, vacations, et cetera, for her own kids. I have zero doubt that she will do everything she can to ensure her kids inherit everything if my dad passes before she does. 

I sincerely hope that she and my dad live well into their 90s. And, if my dad passes before she does, I hope to continue our relationship. My brother and I have tried to get them to put together a trust or a will without success. The thought of my step siblings getting our childhood home and extension property on top of my grandparents’ inheritance makes me sick to think about. Four of them are living in poverty caused by addiction and poor life choices, while the other two, and the widow of the youngest, are decent people who I want to believe would be fair if anything happened. But I suspect they would become nasty and selfish. 

What rights do we have to prevent her from taking everything if he were to pass first? I know my father would provide for her kids if the situation were reversed. We are still hopeful they will put together a will/trust, but what rights do we have if it doesn’t happen? 

Stressed in Utah

Dear Stressed,

For selfish, read fearful. For nasty, read fearful. For unreasonable, read fearful. For a potential war over a $3 million estate, where there are multiple siblings and step-siblings involved, read fearful. Where money and family and inheritance are concerned, people almost always act out of fear. It does not excuse unpleasant behavior, but it can help us understand it and show compassion for those who are — in our estimation — acting out. 

Old rivalries, past resentments and feelings of insecurity all play into the battle for a family estate. Of course, $3 million is a lot of money, but it won’t stretch as far as one might think between nine potential heirs and one widowed spouse, especially if the surviving spouse decides to give a greater share to his or her children. And as you rightly point out, the outcome could depend on who goes first — your father or your stepmother, especially in the absence of a will.

The secondhand truck was a relatively small gift in the greater scheme of things. But you probably already realize that it wasn’t about the truck. The truck was a trigger, and a proxy for the battle royale that your stepmother may see on the horizon, and it was also an opportunity to pull rank, test her power over her two stepchildren and her husband. When people feel threatened and uncertain, they lash out. Your brother, unfortunately, took the brunt of that.

Your stepmother was, as you say, living on welfare when she met your father. I’m glad she survived and got back on her feet, even if she did so through her relationship with your father. Living through a prolonged period of financial insecurity and experiencing housing insecurity can leave a profound psychological scar. As you say, she makes him happy, and that is everything. That is all parents want for their children, and all children want for their parents.

Inheritance is typically treated as separate property, and would have been your father’s to leave to his two children. However, whatever inheritance your father poured into the house he owns with your stepmother was commingled. They own that property together, and all the equity therein. Under the laws of intestacy in Utah, if your father died intestate — without a will — your stepmother would inherit the first $75,000 of his intestate property, and 50% of the balance.

If your father and stepmother co-own the home they are living in as tenants in common with the right of survivorship, she would inherit that property. Similarly, other life-insurance policies may name her as a beneficiary, and they may also have joint ownership of certain bank accounts. It’s tough to have a conversation with a parent about inheritance, but the only way to have it is to be as honest and transparent as possible. Making a will now will save any unpleasantness later.

Few parents want to leave a battleground and years of ill-will behind. 

Learn how to shake up your financial routine at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. Join Carrie Schwab, president of the Charles Schwab Foundation.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

The Moneyist regrets he cannot reply to questions individually.

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Co., 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.

Also read:

‘I have committed financial infidelity’: I racked up $50,000 in debt to help my troubled son — and have not told my husband. How do I get out of this mess?

‘He pays half of the bills in the house, despite six adults living there’: My son lives with his dad and stepmom. They take advantage of him. How can I get him out?

‘I’m stuck in a penny-pincher mindset’: My spouse and I bought a home, but he only wants to buy high-end items. How can we agree?

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