Thinking of getting remarried? Whether you are divorced or widowed, there’s quite a few things you should consider, in addition to whether you and your new love are ready for marriage. Couples with children from previous relationships should be especially mindful of how to provide a future that is fair for both a surviving spouse and the children, should one spouse die. Here are just a few of the things couples planning a second or subsequent marriage should consider:
Tax consequences. Depending on the planning done with your prior spouse, certain tax advantages may be lost once you remarry, such as portability of a deceased spouse’s unused exemption. You should visit with your accountant prior to your remarriage to fully understand any tax implications your new marriage will have on your tax situation.
Update your beneficiaries. How unfortunate would it be if an ex-spouse received some of your assets because you failed to update a beneficiary designation on your retirement or life insurance account? It is not sufficient to just declare your distribution plans in your will or trust. You must update your beneficiary designations to match your new estate plan. Your estate planning attorney can assist you with this step if you need help.
Have a solid estate plan, IN WRITING. We cannot stress this enough. Put your wishes in a formal, written will or trust. If you have children, a simple will likely will not be sufficient, so look at creating a trust to address all the various needs of your blended family. Include a distribution list of personal items such as jewelry, photos, heirloom dishes and keepsakes. Without a written directive, your family heirlooms may not be passed along to your next generation, even if that was your verbal request. This is a great time to talk with your children about what items they consider emotionally important to them. Having a written plan, such as a prenuptial agreement, is one of the best ways to begin a secondary marriage. A prenuptial agreement will specify what is “yours”, “mine”, and “ours” and what will happen to the distribution of those items upon divorce or death. Because this agreement transpires BEFORE the marriage, much of the stress
is lifted off the relationship. You can also enter into an agreement (a post-marital agreement) after the marriage has commenced, but we have found couples generally have more difficulty coming to an agreement on decisions involving assets after the marriage than prior to the wedding.
Update prior estate planning. Make certain your new estate plan addresses whom your agent(s) will be for healthcare and business should you be incapacitated for any length of time. This can be tricky with blended families because adult children will often want some say in the finances and care for their incapacitated parent, while the new spouse may believe it is his/her right to make those decisions independently. Once you have named your power of attorney agent(s), share this information with your family so no surprises occur if or when an emergency arises. Communicating your wishes for life sustaining measures through a Living Will also becomes increasingly important when blended families are involved. Finally, if you have young children, don’t fail to direct whom will become their legal guardian and conservator should you die while they are minors.
Property titles. How are your real properties titled? Properties held in joint tenancy with rights of survivorship will have vastly different consequences than properties held as tenants in common. Provide a copy of your property deeds to your estate planning attorney and ask them to advise on any changes that need to be made so that your properties are titled in line with your overall distribution plan. If you cannot locate your original deed(s), the Register of Deeds in the county where the property is located can provide you with the most recent copy of your deed, usually for a small copy fee.
Check your Social Security benefits. Whether you will continue to be entitled to receive Social Security benefits as a result of your previous spouse's work record could change upon remarriage. Don’t assume things will remain the same after your new marriage.
Match your business plan to your estate plan. If you are a business owner (LLC, Partnership, Corporation), it’s important to review your Buy-Sell Agreement and Operating Agreement to ensure the documents include a detailed clause for ownership transfer and restrictions upon your death. This clause should correspond with your directives in your will or trust. Family feuds can be circumvented by paying close attention to detail in the business documents.
Consult the correct professionals. Seeking professional advice prior to entering your second marriage is a must. This is NOT the time to experiment with online estate planning services or to ask cousin Ed, who practices mainly criminal law, to prepare your new estate plan. An experienced estate planner will have multiple suggestions for you to consider and will work closely with your accountant and financial planner to ensure the new marriage can begin without the turmoil of financial confusion and miscommunication. Seek counsel many months in advance of your intended wedding date, as difficult discussions and decisions should not be made in haste.
For more information regarding estate planning for blended families, please contact Davis & McCann, P. A., Dodge City, KS. We are members of Wealth Counsel, a national consortium of Estate Planning Attorneys and the National Academy of Elder Law Attorneys (NAELA). We focus our practice on providing clients with the best legal advice on estate planning, Medicaid and long-term care planning, business formation, family business/small business succession planning, probate, trust administration, real estate, and related matters.
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