One of the biggest concerns in estate planning for second marriages is making sure each spouse’s share of the estate ends up with the desired beneficiary. Traditional estate planning distributes an estate to the spouse and then to the children however, that may not comply with ones wishes.
Also, if the proper estate planning is not done, after the spouse dies, the surviving spouse can adjust the documents to disinherit whomever he or she chooses—including the deceased spouse’s children. There are various types of planning techniques that allow you to leave something to your current spouse, while still ensuring that your children will inherit something. Some couples use trusts to accomplish their goals. A family protection trusts can be used to make sure your assets stay in your bloodline, should you choose.
Other options are planning with wills and trusts that pour into a Qualified Terminable Interest Property Trust (QTIP) allowing the surviving spouse to have the income for their lifetime, with the trustee’s discretion to give them the principle of the assets as needed, ultimately allowing the children to inherit the asset when the second spouse passes.
Other things to consider when planning after a second marriage are:
1. Have you updated your Durable Power-of-Attorney and Health Care Proxy, or does your ex-spouse still have the authority to handle your finances and make medical decisions for you when you are no longer able to do those things for yourself.
2. Did you change the beneficiary of your life insurance, IRA, etc.
3. If you signed a pre-nuptial agreement, do you have your copy in a safe place?
Through the proper estate planning, you can ensure that the loved one(s) of your choosing remain(s) in control of your assets and decision-making should you become unable to carry out your own wishes.