Q: How can a second marriage impact an estate plan?
Unfortunately, first marriages don’t always last forever. Whether they end in divorce or death, a second (or third) trip down the aisle is very common.
Before taking the plunge again, many see a divorce attorney for a prenuptial agreement to protect their financial future and that of their children from prior marriages. But prenup or not, it’s advisable to meet with a New York and New Jersey estate planning attorney to make necessary modifications to your existing estate plan.
Often a parent who remarries wants to leave assets to their new spouse and also their children from a prior marriage. An estate planning attorney can craft a personalized plan that protects everyone.
Estate Plan Pitfalls After Remarriage
Failure to modify your estate plan can result in any of the following pitfalls and more:
- leaving your current spouse unprotected
- leaving your children of a prior marriage unprotected
- leaving your estate unprotected from depletion of assets
- leaving your estate unprotected from your former spouse
State laws differ but generally you can’t disinherit your spouse completely and your spouse has a “right of election” to a percentage of your estate, which they can waive or choose not to exercise.
How your own title to real estate and other assets is important in estate planning as are life insurance and retirement beneficiary designations.
One option to consider to protect the new spouse from children forcing them from the house is to give the new spouse a life estate interest in the marital home which allows the spouse to stay there for the rest of their life, and then the property would pass to the children. This is something a real estate attorney can handle.
Children also need protecting from the new spouse. Trusting the new spouse will take care of your children after you’re gone, even if they promise to do so, carries no legal weight. Without legal protections in place, they can create a new will and disinherit your children. Some options to avoid that happening include revocable trusts or a separate marital trust. In high-net worth estates, reduce taxes by reviewing lifetime gifting strategies to children, which is a way to give children annual monetary gifts while you are alive.
The aforementioned marital trust option may carry risks and deplete assets intended for the children in the event the new spouse needs long-term care. Some people forego the marital trust, leave their assets to the children, and provide for the new spouse with a life insurance policy. Estate planning is very customized and the best options will depend upon each client’s personal circumstances.
Speaking of life insurance, it’s important to change the beneficiary on your life insurance and retirement accounts after a divorce of the designated beneficiary is final so your ex doesn’t inadvertently inherit those benefits.
If you need assistance with an initial estate plan, or need to modify an existing one due to divorce, remarriage, or other factors, the estate planning experts at Merlino & Gonzalez can help you. Contact us today to schedule a consultation.
From our offices in Staten Island, New York, and East Brunswick, New Jersey, we represent clients in both states in all aspects of estate planning and estate administration.