Why Every Second Marriage Needs An Estate Plan
If you have followed my columns, you know that I rarely use the expressions “always” or “never.” My usual expression is “it depends.” However, I might break that rule in one circumstance and that is regarding second (or subsequent) marriages and the need for an estate plan instead of just Wills. Wills affect only probate assets, those titled in your own name, not jointly titled, and have no beneficiary designation. An estate plan looks at the whole picture and considers who will receive what on your passing regardless how the assets are titled now. An Estate Planning and Bankruptcy Law Firm explains that an estate plan considers Wills but also makes sure that joint titling, transfer on death and beneficiary designations are consistent with the results you want on your passing.
For second marriages, I might even go so far as to say that every second marriage needs an estate plan. Beginning with those least affected I will explain why.
- You were married before. You have no children by your prior marriage or your current marriage. Your assets are jointly titled with your spouse and you want your spouse to get everything. If you are in this situation, you are the least affected by what I am going to say but you and your spouse should still consider an estate plan. You and your spouse could have different ideas regarding who you want to inherit if you both pass away. Your spouse might want everything on the death of the second of you to go to a favored charity or to her or his family. You might want your favored charities or your brothers, sisters or parents to share. This should be discussed.
- You were married before. You and/or your current spouse had children by a prior marriage and the children are grown. This is a classic situation. All assets including the house might be titled jointly with your current spouse and your current spouse is likely named as beneficiary of your life insurance and 401(k) or IRA. The question is do you or your spouse want to reserve some assets or accounts for children from a prior marriage and, if so, how much? Sometimes a spouse continues to live in the house during her or his lifetime keeping a “life estate” in the house and the children by a prior marriage receive the house on the death of the second spouse. Sometimes children receive something on the death of their parent or are secondary beneficiaries meaning they inherit if your spouse dies first. Sometimes everything goes to the surviving spouse and nothing to the children. Again, this needs to be discussed. Merely naming your children as beneficiaries in your Will does not do it. If everything is joint and nothing passes by Will, they still do not inherit. With Barnstable county practicing area estate planning experts one can be sure of what they need to do.
- You were married before. You and/or your current spouse had children by a prior marriage and the children are minors. You might think that because the children are minors and might even still be living in your house and because you are young, you have everything under control. Not necessarily true. If you die while the children are still minors you might not be able to prevent your former spouse from having custody but you can provide in your Will for another Trustee to handle an inheritance for your children. That Trustee could be your current spouse, your parents, a brother, sister or other relative. Again, these things need to be discussed.
- Finally, planning during your lifetime. While not an estate planning issue, this does affect assets during your lifetime. If you are currently married and have children by a prior marriage, long term care affects both your spouse and your children. There are some protections built into the Medicaid rules to protect spouses, but, with rare exception, no such provisions adult children. The Medicaid exceptions are where an adult child is disabled or has been living with you in your house and caring for you for more than two years. However, other options both for spouses and children are often available with planning even during the Medicaid five year lookback period. For this, you would need to seek help and advice from an elder law attorney well in advance while there are still assets to consider.
About the Author Janet Colliton
Esquire, Colliton Law Associates, P.C. Janet Colliton has practiced law for over 38 years, 37 of them in Chester County, Pennsylvania, a suburb of Philadelphia. Her practice, Colliton Law Associates, PC, is limited to elder law, Medicaid, including advice, applications and appeals, and other benefits planning including Veterans benefits, life care and special needs planning, guardianships, retirement, and estate planning and administration.