Getting Married Again? What to Know About Estate Planning
Estate Planning for Second Marriages and Blended Families
The current divorce rate is expected to be 44.2% in 2022. Second and third marriages are commonplace in today’s times. Most 2nd marriages form blended families with children from prior relationships. Whenever two separate families are merged into one, you run the risk of conflict without a carefully considered estate plan. Your assets are also at risk of being entangled in court, as opposed to being distributed to individuals whom you wish to receive them. Not considering updating or creating an estate plan after a new marriage can lead to pain and confusion for your loved ones, should something happen to you. You should meet with an estate planning attorney to discuss your particular situation. Here are things to consider when updating or creating your new estate plan with a blended family.
Stave off Conflict
In a second marriage, if you have children from a previous marriage, there may be conflicting interests between your spouse and children which can foster dissension between all parties should something happen to you. Your estate plan should have precise terms to avoid or reduce conflict as it would clearly define the exact rights of your beneficiaries, as well as the responsibilities of any trustees or beneficiaries. All parties involved should have a clear picture of your requests and know your exact wishes. Meeting with all parties within a blended family while you are still alive and coherent is a good means of directly sharing your wishes, and can aid in the reduction of any disagreements or misunderstandings should you pass.
Separating your Assets
In a new blended family, you should think about not only provisions for your new spouse, but ensuring your children from a prior marriage receive an inheritance should something happen to you. Suppose you wish to separate your assets so that you and your partner can pass inheritances along to your respective children. In that case, you should think about establishing and maintaining separate accounts as well as a joint account containing shared assets. Having a joint account allows your spouse to claim your assets when you pass, which does not guarantee your children will receive anything. Joint accounts also risk subjectivity to a claim of control by former spouses, so you should consider separating some assets.
In Case of your Incapacitation
It is important to consider planning for your eventual death, and also to consider plans for your potential incapacity. Think about discussing how to handle tangibles such as having a medical power of attorney and a living will. Who would make your medical decisions for you? Who would make financial or legal decisions for you? Do you want your child included in decision-making or just your spouse?
In a blended family, your trustees should be carefully considered. It is commonplace for blended families to have a revocable trust set up naming one spouse as the trustee should the first spouse die before them. This may be the cause of conflict for the children of prior marriages, as the surviving spouse would be in control of all decisions of the trust’s assets.
There are many things to consider when entering a new blended family marriage, and it is important to take appropriate actions for your estate that coincide with your wishes. Efficient planning of your estate can help avoid conflict within your family, save time, and money, and maintain relationships with all parties. Have questions about creating a comprehensive estate plan? Contact us to schedule a consultation 100% free of charge, with no obligation. If you already have an estate plan and have questions, or want to make changes, we can evaluate it and help you bring it up to date. Schedule online today.