Mature couples contemplating remarriage after widowhood or divorce are confronted with a number of unique estate planning problems. The answers to what’s “his, hers, ours and theirs” can be complicated by the larger share that can go to 250 million of their closest friends, via estate tax, if their planning is not well thought out.

Recently, I was visited by such a couple who had been referred to me. Both parties had been widowed for a number of years. Both had children and grandchildren, and both had substantial personal wealth.

Dad had been a successful small business owner who had invested wisely in real estate and a few stocks. His largest stock holding resulted from a $10,000 flyer he took after his wife passed away in 1987 on a new company called Microsoft. Mom’s wealth was concentrated in a 7-figure IRA she had accumulated from her company pension as well as her inheritance from her late husband.

Dad’s current will passes all of his wealth, equally, to his children. Mom had named her two children as beneficiaries to her IRA. If this couple marries, and their current estate plans remain as is, the respective estates face a number of immediate tax consequences. First, upon the death of either and subsequent transfer of assets to named heirs, estate taxes will be due on the amounts transferred. In Dad’s case, this will amount to about 50% of the 10-figure value of his stock. In Mom’s case, the tax bite can be even higher, since first the estate tax of approximately 50% will be paid from the IRA, and income taxes will be due from the beneficiaries upon receipt of the remainder. Her heirs could end up paying 70% or more in taxes on their inheritance.

Further, since Dad’s stock is held as separate and not community property, if Mom predeceases him, his stock basis is not stepped up to the value at date of Mom’s death, as it would be if held as community property.

Conventional planning to correct these problems would diminish the inheritance of some or all of certain heirs – something both would like to avoid. For example, if Dad uses the unlimited marital deduction to leave his estate to Mom, in which case no taxes will be due upon his death, Mom would be able to give the assets to anyone either while she is alive or upon her death – effectively disinheriting Dad’s offspring. If Dad leaves more than $2 Million outright to his children, and not to Mom, the kids will pay taxes on the excess transferred.

If Dad conveys a community property interest to Mom in order to take advantage of the stepped up basis in the event she predeceases him, Mom will own a one-half interest in the property. She has the right to bequeath her interest upon her death to anyone she pleases, again not in the best interest of Dad’s family. Even more ominous to the heirs is the prospect of a future divorce and property split that could deprive Dad of this gifted community property interest.

Mom can avoid the huge tax bite that can come out of her IRA estate by naming her new spouse, Dad, as the beneficiary. If she predeceases Dad, he can roll her IRA into his own and avoid all taxes until the money is withdrawn. Effectively, she has just disinherited her children.

Finally, to further complicate matters, both sets of adult children are well on their way to establishing sizable estates of their own. Property left to them will be taxed when it comes to them, and will be taxed when they pass it on to their children.

Dad, who spent his working career finagling to avoid taxes, was not happy when I pointed out how more than half of his lifetime efforts were heading to a social redistribution of wealth through the tax system.

Does this scenario sound at all familiar? If so, run don’t walk to your trusted estate planner or estate attorney.