The more complicated your life gets, the more complex estate planning can be if you want to ensure your family is fully protected. A second marriage is one of those complicating factors, particularly when one or both spouses have children from prior relationships.
Estate planning is not usually high on the priority list during wedding preparations, but taking a few critical steps now can help build a solid foundation for the marriage. So, add these items to your “must-do” list.
Inventory and Financial Planning
Financial issues are not romantic, and many of us were raised to believe that money is an impolite topic for conversation. So many couples who are about to marry actually know very little about the financial situation of their future partner. This can lead to ugly disagreements in the future.
It is better to schedule time for each spouse to inventory assets and debts and meet for an open revelation and a discussion of whether finances will be mingled in the future or whether each spouse will continue to maintain separate accounts. This is also a good time to discuss what you want to happen to your assets after you pass away.
Update Beneficiaries and Representatives
Some of the most critical estate planning tools often get overlooked when people are updating estate plans. These are the beneficiary clauses in life insurance policies, retirement accounts, and other accounts. Property with a beneficiary clause will go to the person listed regardless of whether you’ve remarried.
While divorce can automatically remove a spouse as the beneficiary of a living trust or as your agent to make health care decisions if you’re incapacitated, a marriage will not assign those roles to your new spouse. If you want to give power of attorney to your new spouse, you need to change your documents. Make sure any account with a beneficiary designation and any document with a designated agent includes the person you want to have the authority or receive the benefit.
Secure Provisions for the Next Generation
Estate plans between married couples often allow for vague results for blended families. If remarried spouses leave all marital property to each other in a will, it can be difficult to know what that includes. The marital estate may or may not include property each owned before the marriage. Instead of leaving the other spouse to figure out what was intended and to leave adequate provisions for biological and stepchildren, it’s better to establish those provisions ahead of time while both partners are alive and in good health.
For instance, if you want to leave your house to the two children who grew up there, then make provisions to do so. This reduces stress and uncertainty for everyone in the family now and in the future. Your estate planning attorney can help you choose the best method for accomplishing your goals, which could include a living trust, will, retitling strategy, or other tools. You might want to establish provisions for grandchildren as well, such as an educational trust.
Let The Nordhaus Firm Help You Protect Your Family’s Future
When estate plans are not changed to reflect changes in your life, you and your family can face critical problems in the future. If it has been three years or more since you reviewed your documents and plans with your attorney, this is a good time for a check-up. Whether you are adjusting to new members of the family or feel as though everything has remained the same, chances are there are some amendments to laws or shifts in your priorities that require an adjustment.