Estate planning for a second marriage can present unique challenges that one didn’t think of the first time around. For instance, if you or your new spouse have children from previous marriages. We will discuss some of the important factors, tools, and strategies to consider when estate planning for a second marriage.

Prenuptial Agreements

With your second, or third marriage, you may be a little bit older and a whole lot wiser the next time around. This doesn’t mean you should throw caution to the wind, planning is still very important. While it isn’t the most romantic task, it’s important for couples to discuss a prenuptial agreement. This becomes especially true if any of the following circumstances apply:

    • One partner is giving up a lucrative career 
    • One partner owns a business
    • One partner has significant assets they want to keep separate from marital assets
    • One partner carries significant debt
    • Children from a previous marriage are involved

If any of the above circumstances apply to you, or If you think a prenuptial agreement makes sense in your situation, the next thing to consider is the timing of the documents. In most cases, the sooner the better is a good rule of thumb. By being prepared, you will avoid the appearance of coercion, which can render some prenuptial agreements null and void. If preparation isn’t your strong suit, be sure to know that your documents need to be signed at least one month before the wedding. Lastly, you and your future spouse should each have an attorney involved in the design and review of the prenuptial agreement.

Review and Update Beneficiary Designations

This is a good time to go back and review all other documents to ensure beneficiary designations are up to date. It’s true that people you have named as beneficiaries in various retirement and other accounts will generally inherit account assets even if other beneficiaries were named in your will. It’s better to double-check now, than not have your last wishes be carried out due to error. Just remember, beneficiary designations typically trump wills. The good news is that it is relatively easy to make and update beneficiary designations.

When you open an IRA or a retirement account, the provider generally offers a beneficiary designation form within the account itself. An exception is with investment and bank accounts where you most likely need to request a transfer on death form when making beneficiary designations or updates. This exception refers to certain laws governing the passing of retirement accounts to spouses. Your spouse typically inherits your 401(k) unless they sign a consent form waiving their right to it. If your goal is to leave your 401(k) to your children, your spouse will have to agree to this in writing. 

Protecting Children from a Previous Marriage

If your estate’s assets are left to your new spouse, your children from a previous marriage may not be provided for in the manner you would have wanted after you pass away. Your new spouse could, upon their death, leave all of the assets to their children, excluding your children. Equally, if most of your estate is left to your children from a previous marriage, there may not be enough assets remaining to provide for your new spouse or any children you have together. This becomes a balancing act that requires proper planning to ensure your wishes, and those of your new spouse, are carried out. At the very least, you and your new spouse should have a will. Without one, intestacy laws will be left up to the state, likely resulting in assets being distributed in a manner neither of you would have wanted.

A trust, or combination of trusts, is typically a better approach for second marriages and blended families than a will. One example, a Qualified Terminable Interest Property Trust (QTIP), provides an excellent form of asset protection. A QTIP Trust can generate income for the benefit of the surviving spouse during their lifetime. When the surviving spouse passes away, the QTIP’s assets can be distributed between mutual and prior children according to the wishes of the previously deceased spouse. Furthermore, if the children are young, assets from the QTIP Trust can be held in another trust, under the control of an independent trustee. This can prevent estate assets from falling under an ex-spouse’s control. It can also protect your children’s inheritances from threats like creditors, lawsuits.

At The Deliberato Law Center, we are here to help you with ensuring your estate plans are complete and secure, specific to your family situation. Do not hesitate to reach out to the Deliberato Law Center either by calling our office at (216) 341-3413 or writing us using the contact form on our website.


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