Blended Families: The Importance of Estate Planning in Second Marriages

When it comes to estate planning, second marriages present unique challenges, particularly when both partners have children from previous relationships and enter the marriage with assets. However, you can meet the long-term needs of your blended families with the help of an experienced estate planner and open communication.

Common Issues with Estate Planning in Second MarriagesThe Brady Bunch Estate Planning in Second Marriages

If you created an estate plan during a previous marriage, you likely had few worries about the long-term needs of your children. Joint ownership presented no difficulties, as your spouse would likely agree with you that the children should inherit the home after he or she passed.

Situations change after a second marriage. Naming your new spouse to your home’s title is a natural decision. However, if you predecease your spouse, he or she now owns the home. The same is true if your list your spouse as the beneficiary on retirement accounts or your life insurance policy.

The issue, of course, is not making these provisions for your spouse. The issue is what happens to these properties after your spouse passes as well. He or she may promise to pass these items to your children, and would likely make those assurances in good faith. However, without a legally binding document, there is no way to guarantee that your children will receive their inheritance.

Family Discussion: That Uncomfortable Conversation is Necessary

Death is one of those topics nobody wants to talk about, and talking about money is just about as unpopular. Both subjects tend to make everyone involved uncomfortable, but the reality is that having an up-front conversation about your estate planning is vital.

It’s best if you and your spouse can talk openly about your goals, and how both of you expect to divide assets among your blended families. You also need to discuss issues such as guardianship, if you have younger children, and any existing financial agreements involving your former spouse.

With sensitive topics such as money and death, some couples prefer the presence of a neutral third party, such as an estate planning attorney. This neutral party helps facilitate the conversation and keep the discussion and process on topic.

5 Steps to Estate Planning in Second Marriages

  1. If you created an estate plan during a previous marriage, revisit that plan. This includes reviewing your will, trusts, beneficiaries, and advance medical directives. If you have financial obligations through a divorce decree, such as a life insurance policy or retirement account naming your ex-spouse as beneficiary, include this information. Reviewing all of these documents helps you form a clear picture of where you currently stand. It also allows you to quickly see where changes need to be made, such as removing your ex-spouse as beneficiary when applicable.
  2. Be 100 percent clear and honest about your intentions as regards to your assets. If you plan to leave everything to your children, your new spouse needs to know this so that he or she can take appropriate steps to ensure his or her own future financial self-sufficiency.
  3. If you hope to spare your family the stress and expense of legal disputes over your estate, spell everything out in your will and trust, including seemingly inconsequential items, especially if your wishes favor one side of your blended family.
  4. Utilize the power of trusts. These documents are particularly powerful tools when working with blended families. They typically allow your loved ones to avoid probate (at least as to assets titled in the trust), and make differentiating who inherits what, and when, fairly easy. For example, you can provide a lifetime income for your spouse while leaving the principle to your children upon your spouse’s passing.
  5. Talk to an attorney, preferably an experienced estate planning. The team at Cholewka Law is passionate about estate planning and helping you provide for your family’s futures. We’ll work with you on every aspect of your estate planning, from advanced medical directives to creating trusts and powers of attorney. Contact us today for a free consultation.

If you have any questions that were not covered in this article, please post your comment below, we will respond promptly.

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