If you’re considering remarriage following a previous relationship, then it’s time to revise your estate planning. New circumstances and loved ones require new plans.
Losing your loved ones through death or divorce can be a very painful experience. This is why it is so lovely for couples when love comes a second time around and remarriage becomes an option. Many Americans have made a second or third trip down the aisle. In 2013, 40 percent of marriages were a remarriage for one or both partners, according to a Pew Research Center report.
For many couples, estate planning has not been as important as finding new love. A survey from planning site USLegalWills.com estimated that 63 percent of Americans don’t have a will, and 9 percent have one that’s outdated. That’s a lot of people who are relying on the law to look after their loved ones with their assets when they die. The complication and challenges of having a blended family also extend to estate planning. Without a will, or without a revised will, what you intended for you spouse and children may not eventuate.
Estate Planning for Remarriage Can Be Complicated
Although we like to think that our blended families will continue to all get along, the truth is that these relationships can often be strained. By getting the help of an wills and estates specialist you can be much more confident that your planning will help to reduce any potential conflict over your estate when you die. A professional can also help you to navigate complexities where you don’t see any. Their experience and knowledge of the law will mean that you look after your loved ones with less chance of a wedge being driven between your surviving spouse and your children from a previous relationship, or between your children and your step-children.
Bryan Mitchell, an Accredited Specialist in Succession Law (wills and estates) at Mitchells Solicitors, warns the law regarding wills won’t necessarily act in the way you’d choose. “Put simply, you cannot rule from the grave. If you leave your combined estate to your spouse, then your surviving spouse can do with it what they want. More often than not, the surviving spouse doesn’t do the right thing. I find surviving spouses often change their will and leave everything to their new partner or their own children, cutting out offspring of their late spouse.
“Unfortunately there is no law that guarantees the estate passes on down the line as the first to die may wish, but there are things you can do to help the inheritance pass down the right way,” Mr Mitchell said.
“For example, if you leave everything to your wife on trust for her lifetime – called a life interest – she gets a legal interest in the estate. She therefore gets the benefit of the estate until she dies, then it gets distributed pursuant to your wishes upon her death. . .Families need to get expert legal advice to weigh up what is best for them. This is especially so in the case of blended families with children from different parents, which can result in very complex arrangements,” Mr Mitchell said.
Remarriage & Getting Your Estate Planning Right
Like with any estate planning, discussing your decisions with your family is a key element in ensuring that your passing is not the catalyst for conflict. Communicating with them what you have decided and why will go a long way in preserving relationships. And while you may be fairly set in your plans, sometimes they will offer an opinion or idea that may enhance your original will and overall estate planning.
Here are some things to consider so that everyone is protected:
Get a will. How you want your assets to be divided up means nothing if you don’t have a valid will. Without a will your estate will simply be divided up according to your state’s intestacy laws.
Ensure your will is up-to-date. It needs to reflect your current situation and finances. This might mean updating not only who gets what, but also updating the guardian of your children/step-children and your power of attorney.
Update your advance health directive. While the sentiments may not change, it’s a good idea to discuss what’s in your health directive with your new spouse and step-children if appropriate.
Update your beneficiaries. Make sure your nominate your new spouse to receive your superannuation death benefits if that’s who you’d like to receive it on your death. Your life insurance death benefit nomination also needs to be updated. Jeff Fosselman, senior wealth advisor at Relative Value Partners in Northbrook, Illinois, encourages clients to update regularly. Fail to update the account, and your ex-spouse — rather than your new spouse, or your kids — could get the proceeds from that life insurance policy. “That can obviously be a pretty uncomfortable situation,” says Fosselman.
To help avoid any uncomfortable situations and to ensure that everyone’s assets are protected, as well as looking after your loved ones , then you need to have a valid and up-to-date will. At Estate Battles, you can speak to Bryan Mitchell who can offer expert advice. We offer a FREE, 10-minute phone consultation. Please contact us today for your blended family, estate planning needs.