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Consider Remarriage Protection

Estate planningCreating an estate plan requires that you and your attorney consider numerous uncomfortable possibilities. One of those is the fact that your spouse may someday remarry.

Although the thought may not appeal to you, you should consider the possible financial consequences, especially your children’s welfare. If most of your estate is set to pass to your spouse and he or she remarries, those assets may no longer pass (either in whole or in part) to your children—whether from that marriage or a previous one. There’s the potential that if your surviving spouse dies first, the assets you passed to her, could fall not only under her control—but also under that of the new spouse.

A properly drafted revocable trust can stipulate that when you die, your assets are to be put in a separate irrevocable sub-trust. While your spouse is the beneficiary of this trust during their lifetime, the provisions of the trust can require that the funds be expended only when no other assets are available.  It can also require that the surviving spouse must create a prenuptial agreement or risk losing access to the assets of this trust share. Your children are irrevocably named as the beneficiaries of the trust at the death of the surviving spouse. This guarantees that your children will inherit the assets you intended for them to receive and that those assets do not become a part of a divorce settlement between the surviving spouse and their new spouse or part of the new spouse's marital share at the surviving spouse's death.

At your death, this sub-trust will qualify for the marital deduction in your gross estate.  Therefore, any assets above the applicable exclusion can go into the trust. This move lets you avoid estate taxes if you own considerable assets.

Finally, this kind of trust planning allows you and your spouse to decide now what your children will receive, eliminating a much more difficult scenario if a new spouse and possibly stepchildren enter the picture after you've died.

Reference: Forbes (June 28, 2017) “What Happens If You Pass Away And Your Spouse Remarries?”

 

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Update to our Process

The unprecedented coronavirus pandemic has taken our entire country by surprise. We understand how difficult this time is for America’s businesses and families.  However, we believe it is vitally important that we make every effort possible to continue to offer solutions that avoid disrupting our important partnership with you, your family and friends.  As you know, estate planning is not something that should wait for a more convenient time, therefore the opportunity to address your important goals both during and after this crisis should not wait.  To that end, we have added the option of a ‘virtual consultation’ to our office process.  You will now have a choice of either meeting with us in our office or in the comfort of your own home.