If you’re anything like the typical person contemplating a second (or third) marriage, you are older, have children, have accumulated property, and have been enjoying a standard of living you would like to maintain. Below are a few important considerations for estate planning for a second marriage.
The Des Moines Register recently published an article entitled, “Estate planning for a second marriage,” that discusses several great tips to keep in mind if you are faced with this situation. Here are a few:
Discuss Money. This is a major cause of stress in any marriage; however, it can be really challenging in a second one. You and your future spouse should talk about and come to an agreement on all of the important financial issues. Make plans that both of you are OK with. If you’re considering a prenuptial or postnuptial agreement, it’s all the more important to tell all (finances-wise).
Consider a prenuptial or postnuptial agreement. This contract is critical if you will bring assets into the marriage, the article explains. A surviving spouse has the legal right to take an “elective share” of the deceased spouse’s estate, regardless of what is in the will, usually one-third or one-half of the elective estate. If this happens, it may result in the unintentional disinheritance of your children or other heirs. The only way to trump the elective share laws is to sign a prenup or postnup where both parties waive their rights to the elective share. This reduces the chance that state law will interfere with your intended estate plans.
Revise your will and other estate planning documents. Remarriage doesn’t revoke a will (although state law can supersede it), so it’s critical that you draft a new will that takes into account your new circumstances.
Providing for children from a previous marriage. It can be a big concern in many second marriages to provide for the new spouse without cutting out children from an earlier marriage. An estate planning attorney can help you place your assets into a qualified terminable interest property (QTIP) trust. With this, all trust income is devoted to supporting the surviving spouse while the principal is preserved for the children. Plus, assets passing to a valid QTIP trust qualify for the marital deduction, which helps reduce possible estate taxes at your passing.
Reference: Des Moines Register (April 14, 2015) “Estate planning for a second marriage”