While many people may discuss rising divorce rates, it may be a lesser-known fact that remarriages are also on the rise. Finding someone to share a new chapter of your life with can be a big change and an exciting one at that. As with many other big life changes, you should consider the impact it can have on your estate plan. If you are remarried or will be in the near future, now is the time to consider updates you may wish to make to your estate plan.
Estate Plan Updates You May Want to Make After Remarriage
You will likely want to consider updating your advance health care directives, such as your health care surrogate. You may have your former spouse listed as your surrogate and want to update this to your current spouse. It is also fairly common for a person to list his or her spouse as the personal representative of an estate. If this is the case, you will likely want to update this as well. Consider naming an alternate personal representative in case your spouse predeceases you or is otherwise unable or unwilling to serve.
You should also take time to update beneficiaries of things like retirement accounts and life insurance policies. The beneficiaries listed on these things will get access to the funds upon your death. It does not matter if a different intention is stated in your will. The named beneficiaries on the account will take precedence
Remarriage can add a layer of complexity to estate planning that may not have been in play previously. Having only a basic will in place can lead to things like the unintentional disinheritance of your children, particularly those from a previous marriage. Additionally, remarriage is likely to occur later in life than a first marriage. This means that a person may be more likely to be bringing in significant assets to the marriage. You will want to take steps to ensure your assets are protected for you and those you wish to receive them upon your death
When reflecting on your estate plan after remarriage, think carefully about the potential implications of your plan. For instance, some choose to leave everything to the new spouse and have an informal understanding with the spouse that he or she will then provide for your children from a prior marriage after you pass away. This type of arrangement puts your children at needless financial risk. There are ways that you can both provide for your spouse as well as protecting and providing for your children.
For instance, you could create a revocable trust which provides coverage for the financial needs of both your surviving spouse and children. You could create a separate trust for your children, especially if they are younger or have poor spending habits and you wish to restrict access to a lump sum of funds all at once. You can create a trust dictating how and when distributions from the trust should be made to your children. You can also create a separate marital trust in order to designate specific funds for your spouse. This will allow you to directly segregate funds for the benefit of your spouse. In a marital trust, you may also specify that any unused funds pass to your children upon the death of your spouse.
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