Are you wondering what’s fair in a second marriage with estate planning? Need help understanding second marriage home ownership or inheritance issues? Getting married for the second time can present some unique challenges when it comes to financial support for family members of previous partnerships.
If you don’t think about this carefully, you may end up neglecting certain relatives by accident. Or even potentially causing conflict with your surviving family members. We’ll go over some tips below to help you prevent this.
Discussing Estate Planning
One of the best ways to get clarity on protecting your children’s inheritance in a second marriage is to have an upfront discussion about it with your family. Talk to your spouse about how you want to provide for each other, what you wish to leave your kids, and what your goals are.
Topics to Cover
Most people don’t enjoy talking about death. So, if you feel uncomfortable bringing second marriage wills and other related topics up with your partner, you can consult and include an estate planning attorney in the conversation. Here are some topics to bring up:
- Contractual or financial responsibilities from a previous marriage or divorce agreements.
- How you’ll handle guardianship for your surviving children.
- Your goals for supporting relatives, including biological and step children.
Review and Update Previous Agreements
You’ll want to include beneficiary designations, trusts, and wills from previous marriages in your discussion with your family. These agreements or arrangements can impact your present goals, so the sooner you discuss them, the better.
Define What Belongs to Who
As soon as you’ve fleshed out your goals with your spouse, talk about your property and assets to define what belongs to which members of the family. If you own a house together, who will keep it in the event of divorce? What percentage of your financial accounts should be left to each child? Here are some subtopics to give your discussion some direction:
- Social security: You may have been entitled to certain benefits from a previous marriage, which no longer apply after getting re-married. The best way to find out for sure is to consult an estate planning professional and ask questions.
- Your age: If you and your spouse are around the same age, it may be more appropriate to jointly own your assets. If one of you came into the arrangement with much more than the other, it could change how you wish to divide your assets once one of you passes.
- Children: If you have children from a previous or current marriage, they will likely be a main topic of discussion for estate planning. Partners with children from their previous marriage will probably want to make sure their kids are taken care of. Get clear about each of your goals with this.
- Local laws: Discussing and making a will after a second marriage is not only a personal matter but must align with the laws where you live. Look into potential consequences of your asset-related decisions while discussing estate planning with your partner. Often, the law will state that your income and assets belong to you both equally.
- Account specifications: To clarify your intentions and avoid probate (a time-consuming and expensive method for administering an estate), you’ll want to register your accounts in accordance with your current goals and future wishes. This is your chance to decide whether to jointly own an account, or have it transfer to a certain beneficiary upon death.
Keep Your Information Updated
An estate plan isn’t something you make once and leave alone afterwards. It must be regularly revisited and updated as necessary while you encounter periodic life changes. If you have an estate plan that you made before getting remarried, you must revise the plan to protect your new family.
Your current estate plan is very unlikely to cover your current wishes and intentions, so keeping the information current is imperative. Here are a few methods for ensuring your estate plan is up to date and supports your goals:
Set Up a Trust
An essential component of many estate plans, a trust will hold your assets for beneficiaries and defines how they should be passed along to chosen parties. If your partner gets married again after you pass, the remaining assets may become commingled.
By setting up a trust, you’re protecting assets for each of your children. Trusts can last for many years or even for multiple generations, help your family avoid probate, and get your assets to your beneficiaries faster.
Create Mutual Wills
An essential step in creating your estate plan regarding a second marriage is drafting mutual wills. Talk with your spouse about creating wills that mirror instructions for transferring assets to your children and the surviving partner.
This is a good method for dividing up personal property and avoiding potential conflicts about who gets what between your surviving relatives. Just keep in mind that mutual wills depend heavily on faith, as your spouse can technically change the will once you pass.
Keep Beneficiaries Updated
After you get remarried, make sure you update your beneficiaries to reflect your new wishes. If you don’t, your ex might receive some of your property or assets when you pass. This includes updating beneficiary information on life insurance, savings, and retirement accounts.
Choose your beneficiaries carefully. While it may make sense to you to name your current spouse as your beneficiary, remember that they can choose to bypass your children later on. If this is a concern for you, spell out the individuals who you wish to receive your assets once you pass.
Estate Planning Help in Arizona
Estate planning can be complicated, especially when it concerns second marriages and blended families. The best way to protect your goals and stay in line with Arizona laws is to consult an Arizona estate planning attorney for advice and guidance. Each state will have unique laws that families, beneficiaries, and executors all must follow, and Arizona is no different.
At JacksonWhite we offer a wide variety of estate planning services and there is no situation too complicated for our experienced team.
Call our Arizona Estate Planning team at (480)467-4325 to discuss your case today.