A Second Walk Down the Aisle can Complicate Estate Planning

Major life events should result in a person reviewing and possibly revising their estate planning documents. Though most people hope to marry once in their lifetime, a reality of our society is that second marriages often occur. To ensure that you provide for your current spouse and juggle benefits for your children from both marriages, diligent planning is necessary.

• Update your will and other document
  • Some states void an ex-spouse beneficiary or executor designation upon divorce, but it always a good idea to update documents to ensure that your intentions are clear.
• Consider a prenuptial agreement
  • For states that have an “elective share” for spouses and disallow disinheriting – even when the new spouse is financially independent – prenuptial agreements can waive these rights to each other.
• Review beneficiary designations
  • Just as with wills, beneficiary designations for insurance policies, annuities, and retirement plans may not change automatically upon a divorce. If a designation is a minor child from the previous marriage, keep in mind that your ex-spouse may become that child’s guardian and have access to those funds.
• Make the most of trusts
  • If you believe that it is possible that your current spouse or children may be irresponsible with any wealth given to them outright, trusts may be the answer. An option is to set up a trust that provides your new spouse with income for life and preserves the principal for your children.
• Avoid unintended consequences
  • Discuss with your estate planning advisor any revisions necessary to ensure you are not surprised by unintended consequences down the road.

See A Second Walk Down the Aisle can Complicate Estate Planning, FSA law, March 25, 2019.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.