If you have remarried, how do you make sure that both your new spouse and any children you have from a previous marriage will inherit from you if you pass away before your new spouse passes away? Who will inherit your home—your new spouse or your children from your previous marriage?
How can you provide for your current spouse financially, while leaving an inheritance for your children from a previous marriage as well? You certainly don’t want your children from a previous marriage to be disinherited if you leave everything to your current spouse, who may then pass your assets on to her own children or others, leaving nothing for your children.
Here are several things you can do to address these concerns:
Update Your Will
Most estate planning documents remain effective after a subsequent marriage. But, in some states, your new spouse can void your Will as it applies to him or her if the Will was executed prior to your marriage.
In these states, if you have children from a previous marriage and your new spouse decides to void your Will, he or she will typically be entitled to the first 75% of your estate plus 50% of the remainder. If you don’t have children from a previous marriage, your new spouse will be entitled to 100% of your estate.
Updating your Will after you remarry is a simple solution to ensure that it is valid and that your estate will be distributed in the manner you wish.
Understand the Spousal Elective Share in Your State
The spousal elective share is intended to protect a surviving spouse from being disinherited and impoverished by a deceased spouse. What this typically means is that even if you have a Will in place, your surviving spouse can elect to receive a minimum amount from your estate (typically ⅓ or ½) if it was not left to them otherwise.
In other words, if you don’t leave anything to your surviving spouse, he or she is still entitled to a certain percentage of any assets you leave behind, including cash, real estate, insurance benefits, retirement accounts, pay-on-death accounts, and many Trusts.
This is a rather oversimplified explanation of the spousal elective share, which varies from state to state and can be much more complicated. So, it is important that you consult with an experienced estate planning attorney to better understand what to expect.
An experienced estate planning attorney can also advise you on simple estate planning measures that you can put in place to foreclose many of the claims your new spouse will have on your estate that will compromise your ability to provide for your children from previous marriages in the manner you wish.
Use a Revocable Trust
Take steps to have your assets transferred after you pass away via a revocable trust. A revocable trust is one that is effective during your lifetime and that can be amended or revoked as long as you are alive and well.
A revocable trust will allow you to have complete access and control of the assets in your trust during your lifetime and ensure that after you pass away, any instructions you leave for the distribution of your assets, as it relates to your new spouse and your children, will be followed. This is because once you die, your revocable trust will become irrevocable, meaning that the terms of the trust will no longer be able to be altered or changed by anyone.
One way to use a revocable trust to provide for both your new spouse and your children from a previous marriage is to have the assets in your trust invested to generate income. That income can then be distributed to your new spouse for the rest of his or her life. Then, after your new spouse passes away, the trust principal can be distributed to your children, either outright or through another trust arrangement.
You can even give your successor trustee the authority to distribute a portion of the trust principal to your new spouse during her lifetime if need be. Furthermore, you can stipulate that if and when your new spouse remarries, his or her interest in the trust expires.
Pass Your Assets via Beneficiary Designations
Beneficiary designation forms that accompany certain assets, such as life insurance or banking and investment accounts, will allow you to designate who will receive the proceeds of these accounts when you die. Whomever you name as a beneficiary on these forms will inherit the underlying assets, regardless of what your Will or trust says. What’s more, assets that pass via beneficiary designations bypass probate and can be immediately inherited by the beneficiary.
What Can Happen If You Don’t Plan?
Although state laws and other factors will also play a huge role in what happens to your estate after you die, if you die without the proper estate planning documents in place, you may be unable to:
- Provide for both your new spouse and your children from previous marriages in the manner you wish.
- Ensure that your children from previous marriages receive what you intended.
- Keep your new spouse from controlling how much your children inherit from your estate.
- Provide for your family’s expenses during the administration of your estate after you pass away, which can last anywhere from a couple of months to a couple of years.
Consult with an Experienced Estate Planning Attorney
You can do estate planning on your own, but an experienced professional can advise you of your rights, obligations, and options to achieve your estate planning goals. Working with an experienced estate planning attorney is the best way to ensure that you have the right documents in place to provide for your new spouse after you’ve passed away, while avoiding the possibility of your children from previous marriages being disinherited.
Working with an experienced attorney can help you create an estate plan. For help getting started with your estate plan, contact us or sign up below for one of our events.