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Saying “I Do” Requires an Estate Planning Review

Seniors getting marriedA major challenge for those walking down the aisle again is how to reconcile preserving assets for children from a prior marriage and still taking care of the commitment to a new spouse.

If you’re a senior and are thinking of getting married, after I’ve offered my congratulations and best wishes, I’d recommend that you look ahead to you goals and objectives for your blended family in this exciting endeavor; address how your existing family and new spouse will relate to one another now and after you're gone and who will be in charge of the money. This is a time for full disclosure to children (even if you feel that it’s none of their business) in order to allay your children’s fears of abandonment and to offer everyone the best chance to build and sustain a meaningful familial relationship.

Every state except Georgia gives rights to a spouse to make an elective share against a decedent spouse's estate or have the right to community property. That means that a portion of an estate could go to the new spouse even if the decedent's will disinherits him or her. Unless you expressly agree prior to your marriage that the survivor will not make a claim for the elective share, he or she typically has an intestate right against the probate estate.

If an individual has an ERISA retirement account, the spouse likely has certain rights to it—whether it is a defined benefit or a defined contribution plan. IRAs aren’t subject to the same rules. In many states, the surviving spouse has rights to certain personal property. Sometimes this is based on values, and other times it’s set out in a state statute.

If there is no estate planning document, such as a will, power of attorney or health care directive, the new spouse is often elevated to the status of de factor decision-maker, perhaps awarded the authority to deny access to anyone who might want to have a say in the affairs or care of the incapacitated spouse.

The ex-spouse may still be involved because assets could still be left to your ex if you fail to update your beneficiary designations—even if you intended to leave things to your new spouse and/or children instead. You might be contractually obligated to keep your ex-spouse as beneficiary of a retirement account or life insurance policy for a certain period of time. Check the fine print of your divorce agreement.

When you’re updating your estate planning documents, also think about the following issues. First, consider whether you’d like to name your new spouse as your trustee/executor/agent because the disposition of assets becomes tricky when there are kids from prior marriages. Next, take a look at your assets and decide if you want to hold them individually or jointly. Jointly-held assets with rights of survivorship means that your surviving spouse will inherit these assets automatically without probate. Note that in a community property state, property that is obtained prior to marriage or in an inheritance can retain its character as separate property.

If your new spouse moves into your house, you’ll have to decide if you want to add his or her name to the deed and to the mortgage. You should consider where your spouse will live if you die first. Also, you may need to specifically bequeath certain personal items to your children—depending on family significance and your wishes—and be aware of how “children” is defined by your will. This could include only your own children or also your spouse's children. Here are a few other common estate planning mistakes people make after remarrying:

  • Beneficiary designations left out-of-date;
  • Assets unintentionally comingled;
  • Failure to work with estate planning attorney on new estate planning documents;
  • No prenuptial;
  • Instructions to loved ones are verbal, not in writing;
  • Failure to properly title the house; and
  • Not buying long-term care insurance or planning for possible nursing home care.

Have a qualified estate planning attorney walk you through these details in a step-by-step manner to help avoid pitfalls. Don’t make one or more of these errors. These kinds of little mistakes can have big consequences. Prenuptial agreements are just another form of estate planning so call or register online for a complimentary consultation so that we can help you start you new life on the right foot.

Reference: CNBC (July 28, 2016) “Getting remarried? Protect your assets and your interests”

 

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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.