Second marriages and estate planning

Losing a parent is devastating. It is said this experience begins the next chapter in our life and that of the surviving parent.

When the surviving parent finds a new special someone, it can create mixed emotions for the family. On the one hand, you are happy to see dad or mom finally getting on with life, experiencing a second bite of the apple, with a fresh taste for life.

At the same time, you're suspicious of this new friend. Acceptance of the relationship brings a feeling of disloyalty to the deceased parent. All of these emotions are common and normal.

With second marriages and estate planning, staying actively engaged with your parent will minimize incidents of fraud or undue influence by third parties.

Everyone has the ability to protect their own assets through proper estate planning.

Frequently, married couples will sign reciprocal wills. Generally, this means the assets of the couple will pass to the surviving spouse, then, on the death of the surviving spouse, the assets should be distributed among all their children.

What sometimes happens is that a second marriage surviving spouse will change the reciprocal will to disinherit the children of the deceased spouse, instead, leaving all remaining assets to only the children of the surviving spouse.

However, there may be ways to prevent this occurrence, simply by discussing the following as listed below with your estate planning attorney.

Prenuptial/Ante-nuptial Agreements

A prenuptial agreement is signed prior to marriage while an ante-nuptial is signed after marriage. Both agreements define how each spouse's property shall be divided in the event of death, separation or divorce.

The thinking in this instance is that spouses cannot bequest to heirs what is not theirs to give.

When there is a likelihood of a serious illness which may require nursing home care, it would be important to consider that Medicaid may ignore such agreements, possibly making the assets of both spouses available for each other's care.

Contract

In this instance, husband and wife make a contract to create reciprocal wills. Further, and this is the essential part, each spouse agrees not to change or revoke said will after the death of the first spouse under any circumstances. This serves to protect the wishes of the deceased spouse.

Deed Transfer

In rare instances, it may be appropriate to transfer a marital home from parents into the names of parents and their children. There are risks and tax consequences as with any transfer.

A deed transfer will at least allow the children from the first marriage or whoever is named on the deed to receive a share of the assets.

This is because when the first spouse dies the ownership interest cannot be changed without the consent of all the owners, which would include the named children on the deed.

Trusts

Perhaps the best way to preserve assets for your heirs is to create a trust. Since there are many different types of trusts, having the sound advice of an attorney is very important.

A trust can be designed to provide income for a remaining spouse during his or her lifetime, then upon death, the funds will be distributed to the designated beneficiaries. A trust can be revocable or irrevocable, depending on the goals of the grantor.

By Victoria M. Dalton

For more informatiopn on these matters, please call our office at 305-548-5020.

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