You have arrived at your second marriage a little bit older and (hopefully) a little bit wiser. Second marriages and blended families present their own issues when it comes to estate planning. You would like to take care of your spouse and your children, but letting them work it out after you are gone is a recipe for disaster. Once you have been through a divorce, you understand that "happily ever after" isn't always. Fortunately, estate planning that takes into account your unique family situation can alleviate most of your concerns, allowing you to freely pursue your second chance at happily ever after.
Good communication is key. The first step is to have an honest conversation with your new spouse about your existing finances, goals for the future and how you expect your assets to be distributed. These conversations can be difficult and emotionally-charged, but they will reap innumerable rewards in the long run. If your children are adults, you may also want to include them in these discussions so that everyone knows what to expect.
If possible, I suggest consulting with an estate planning attorney prior to remarriage to assess your options. But, if you have said "I do" again, it is not too late! The most important thing is to do something. Don't let the state determine how your assets will be distributed.
Advertisem*nt
The biggest concern in second marriages is ensuring that each spouse's share of the estate ultimately ends up with his or her desired beneficiary. That is, if each spouse has children from other relationships, those children's inheritance is protected even if their parent is the first spouse to die. Traditional estate planning distributes an estate to the spouse and then the children. But, after the first spouse dies, the surviving spouse can easily amend the documents to disinherit whomever he or she chooses--including the deceased spouse's children!
TRUSTS
If one of you brings significant assets to the marriage, it may make sense to prepare a separate property trust, before you get married to ensure that those assets ultimately end up with your chosen beneficiaries. You may make your current spouse the beneficiary of the trust until their death and then your children. Or you may have your separate property distributed directly to your children.
Whether or not you have a separate property trust, you should also establish a joint trust with your spouse that has protections for the children. For example, upon the first of you to die, half of the couple's assets are placed into an irrevocable trust for the benefit of the surviving spouse. The surviving spouse is able to live off of the income generated by that trust, but the principal is preserved for the children of the deceased spouse. This kind of trust does require some administrative time and costs, but they are well-worth the peace of mind provided.
POWER OF ATTORNEY FOR FINANCIAL AFFAIRS
A durable power of attorney gives you the opportunity to name a trusted individual to manage your financial affairs and legal decisions during your life if you are not able. Make sure that any previous powers of attorney (perhaps naming your previous spouse) are revoked. Execute an updated power of attorney naming your spouse, your children or another trusted individual as your agent.
Advertisem*nt
ADVANCE HEALTH CARE DIRECTIVE
Similar to a power of attorney, a health care directive allows you to name someone you trust to make decisions about your health care when you are not capable yourself. An updated health care directive is always helpful for medical professionals in the event of an emergency. This also gives you a chance to discuss your feelings about your end-of-life care, organ donation and burial arrangements with your new spouse.
BENEFICIARY FORMS
You may have a significant amount of wealth in life insurance policies and your retirement accounts. The beneficiary designations on those assets will control who they are distributed to, not your will or trust. Many people forget to change beneficiaries when they get divorced.
Think holistically about these accounts and your other estate planning. For example, you may want to provide a death benefit through a life insurance plan for your spouse, while allowing the rest of your estate to pass to your children. It is extremely important that you do not name minors on your beneficiary designations. Minors are not legally able to control assets and a guardian may have to be appointed by the court to manage the asset until the minor turns 18. Speak to your estate planning attorney about strategies to allow your children to benefit from your life insurance and 401K plan without court intervention.
PERSONAL INFORMATION AND CONTACTS
You and your new spouse may be still learning about each other, and that includes details about financial assets. Often people have smaller life insurance policies that have been owned forever, a little-used account at a credit union or an old 401(k) plan from a job left long ago. Now is the time to share that information and make changes or transfer those accounts. It will be so helpful for your grieving spouse and family to not have to play detective after your death.
Moreover, your new spouse may not know all of your family and old friends. Providing names, telephone numbers and email addresses for these people so that they can be notified if something happens to you will help connect your spouse with your past.
Advertisem*nt
Every blended family is different and each presents its own set of challenges, both legal and personal, but a trusted attorney can help guide you through the process and achieve your goals.
Alexandra Smyser is an Associate Attorney at the Law Offices of Donald P. Schweitzer in Pasadena, Ca. She handles all areas of Estate Planning including trusts, wills, probates, general and limited conservatorships, and special needs trusts. For more information on estate planning contact Ms. Smyser at (626) 683-8113 or visit http://www.pasadenalawoffice.com.
Support HuffPost
Our 2024 Coverage Needs You
Your Loyalty Means The World To Us
At HuffPost, we believe that everyone needs high-quality journalism, but we understand that not everyone can afford to pay for expensive news subscriptions. That is why we are committed to providing deeply reported, carefully fact-checked news that is freely accessible to everyone.
Whether you come to HuffPost for updates on the 2024 presidential race, hard-hitting investigations into critical issues facing our country today, or trending stories that make you laugh, we appreciate you. The truth is, news costs money to produce, and we are proud that we have never put our stories behind an expensive paywall.
Would you join us to help keep our stories free for all? Your contribution of as little as $2 will go a long way.
As Americans head to the polls in 2024, the very future of our country is at stake. At HuffPost, we believe that a free press is critical to creating well-informed voters. That's why our journalism is free for everyone, even though other newsrooms retreat behind expensive paywalls.
Our journalists will continue to cover the twists and turns during this historic presidential election. With your help, we'll bring you hard-hitting investigations, well-researched analysis and timely takes you can't find elsewhere. Reporting in this current political climate is a responsibility we do not take lightly, and we thank you for your support.
Contribute as little as $2 to keep our news free for all.
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. Would you consider becoming a regular HuffPost contributor?
Dear HuffPost Reader
Thank you for your past contribution to HuffPost. We are sincerely grateful for readers like you who help us ensure that we can keep our journalism free for everyone.
The stakes are high this year, and our 2024 coverage could use continued support. If circ*mstances have changed since you last contributed, we hope you’ll consider contributing to HuffPost once more.
Already contributed? Log in to hide these messages.