Remarrying can be a great new opportunity for you and your family. However, it can also bring along some unforeseen challenges involving the inheritance of your estate. This process can be even more complicated if you have children from a previous marriage.
The following guide offers some steps you can follow to avoid these issues before they come up. It also tells you want to do, if inheritance issues do arise.
Assess Your Estate
The first and most important step is to take inventory of your estate.
This is something that you may even want to do before tying the knot. Determine what are your assets and liabilities. Be open with your spouse or potential spouse about all these factors. You may have commingled assets or liabilities from your previous marriage. In this case you need to know your equity stake and how much you are responsible for. These commingled assets or liabilities can include shared credit or debit cards, bank accounts, and real estate.
Answer Some Questions Upfront
You have to decide a series of important questions. Will you file your taxes separately or jointly? Who will be named as the personal representative or trustee of your estate? Will you combine estates or keep them separate? It may be helpful to involve a legal professional who has experience dealing with inheritance and estate planning. This helps a couple navigate this tricky and at-times uncomfortable process.
Update Your Beneficiaries
Beneficiary designation trumps what is written in your will. It can result in some potentially unintended consequences if you do not name your new spouse as a beneficiary on life insurance or investments before your death.
If this is the case and your previous spouse is still listed as your beneficiary at the time of your death, that spouse will receive the pay out from your life insurance. Alternatively, if you only list your second spouse as a beneficiary on everything, any children from your first marriage are not entitled to any of the money from your investments or your life insurance. If you do not have a will at the time of your death, the state statutes will determine the distribution of your assets, which can be a messy process that you can avoid by being proactive about creating and updating your legal documents.
Make Decisions About Property Titles Owned Prior To Marriage
Another difficulty can be real estate inheritance, especially if property was a commingled asset. Similar to the beneficiary designation discussed above, the person listed on a property title trumps the person listed in your will to receive that property. So, if you owned property that your spouse will move into, you must decide if your spouse will inherit the house or if your children will. You can also establish a trust that enables your spouse to live in the home until they die, at which point the property passes to your children.
Discuss Health Plans and Medical Power Of Attorney
If anything were to happen to you, it is important to have a plan established ahead of time about who will make medical decisions for you if you are unable to.
This may be a decision that both your spouse and your children would like to make jointly. Talk to all the involved parties ahead of time to draft the proper documentation and establish your intentions. It is also often the financial obligation of a spouse to support the other in the case of a medical complication that involves the other spouse to pay for the bills with their assets. This could include income and an IRA. Laws vary depending on state, so make sure you know what stipulations apply to you.
Talk About Signing A Prenuptial Agreement
In the event of divorce or the death of your second spouse, a prenuptial agreement can establish the terms of inheritance or division of assets and debts. This also requires both spouses to fully disclose their financial information.
Any adult children from a previous marriage may also want to be involved in the discussion of signing a prenuptial agreement if it affects their inheritance. You may want to talk to your spouse or a professional to decide if signing a prenuptial agreement is the right decision for you.
Seek A Trusted Inheritance Professional
When it comes to the tricky process of inheritance when you remarry, it may be a good idea for you to seek help from a trusted professional at some point in the process. If you have any questions or concerns about the inheritance implications that accompany a second marriage, talk to the Law Offices of Gary I. Handin, P.A. We offer property and estate planning services to provide you with exceptional legal counsel. Contact us today or call 954-796-9600 (toll-free 877-242-9942) to learn more about what we do and how we can help you.