The key to making sure your assets are passed on to children from a previous marriage after you’ve remarried is estate planning.
Fifty-seven percent of people over the age of 55 remarry after divorce or the death of a spouse according to 2013 statistics, and the older you are at the time of marriage, the more likely you are to come into these second marriages with assets such as retirement benefits, family heirlooms, life insurance policies, brokerage accounts, real estate, etc. It is likely that you will have specific ideas about how these accounts and items should be dispersed after your death, and this is why estate planning is key.
“When I talk with older couples who are remarrying, I ask them, ‘if you’re both on a boat and it goes down, can you trust the two sides of the families to get together and do what you wanted?’” said certified financial planner Lili Vasileff, founder and president of Divorce and Money Matters in Greenwich, Connecticut.
Estate Planning avoids conflict. If you die without a will, the court in your state will decide who gets what, and that procedure can often be long, drawn out, and messy. Every estate is different, and some can be very complex, but here are some important things to keep in mind when considering divvying up your assets:
–Account Beneficiaries: The person listed as your beneficiary will get the benefit after you die, so if your ex-spouse is still listed as your beneficiary, they will receive the benefit. Make sure to update all your account beneficiaries accordingly. The one caveat to this is 401(k) accounts. Laws require your current spouse to be the beneficiary on these accounts unless they legally agree otherwise, meaning if you pre-decease him, the money is his to do with what he wants. If you want the money to go to your children, or partially to your children, these arrangements must be made beforehand.
–Your House: Married couples often own a home jointly, and the laws in your state as well as the way the property is titled can greatly impact whether your children can inherit part of your home. It is important to speak with your real estate attorney regarding the laws in your area and your wishes.
–Your belongings: If there are particular items you wish to leave to certain individuals, it is best to leave a detailed inventory as well as express your wishes to your family ahead of time.
–Consider a Trust: Trusts are a way to give money to an heir based on any criteria you choose. A trust is created to hold your access on behalf of your beneficiary, and they can only receive the money when and how you choose. An experienced elder law attorney can help you set this up.
The most important aspect of estate planning is communication, not only with your spouse but also your heirs. While you may not want to go into exact dollar amounts, it is important to set expectations that can mitigate conflict between your spouse and your children.
An experienced elder law attorney can help you consider all the important aspects of estate planning, including setting up a durable power of attorney, assigning someone to help manage your finances in the event that you are no longer capable of doing so for yourself, as well as a health care power of attorney, living will, and will.
Reference: CNBC (October 10, 2019) “Here’s how to avoid accidentally disinheriting your kids after you remarry”