As divorce rates increase, the number of second marriages
and blended families (e.g. “my children, your children, our children”) is also
on the rise. The combining of two
families can be a wonderful and enriching experience. However, it can also present significant
challenges as spouses learn to navigate their new marital relationship, while
at the same time managing relationships with step-children. One unique challenge of remarriage is making
decisions about how you will provide financial support for your new spouse,
your children from a previous marriage, your children from your remarriage, and
your step-children after you've passed away.
Most people don’t like to think about, much less discuss,
what will happen with their assets after they die. It can be a much more difficult and awkward
discussion after you remarry, especially if you and/or your spouse have
children from a previous marriage.
Although many would like to avoid the topic entirely, comprehensive estate
planning becomes even more crucial after remarriage.
As I meet with remarried individuals to discuss their estate
plans, I frequently am told, “I trust my spouse to take care of my
children.” This comment is usually made
in response to my inquiries as to how estate assets should be divided upon the
first spouse to die. My response to them
is frequently that this is not a matter of trust. Rather, the benefit of a clear and
comprehensive estate plan is that it details the spouses’ desires and limits
questions as to how the surviving spouse should manage the assets of the
pre-deceased spouse. To use a sports
analogy, a game of football is not going to be enjoyable if one of the
participants is following the rules of basketball. The estate plan details the “rules” that the
parties are agreeing to follow and helps ensure that the parties are “on the
same page.”
As an estate planning attorney, it is most helpful for me in
advising my potential clients if they have already discussed with one another their
goals and expectations for the distribution of their assets after death. You and your spouse should have an open and
candid discussion as to how you expect your children to be provided for after
your death.
Once you have discussed these issues with your spouse, you
should look at each spouse’s assets and together make a determination of what’s
“yours, mine, and ours.” In other words,
consider what each of you brought into the marriage and what have you acquired
since the marriage. The next step would
be to agree as to how those assets should be owned going forward. Will they be commingled and owned
jointly? Will you keep them
separate? These decisions can have a
major impact on how assets will be divided.
For example, if you bring a home into the marriage and decide to deed
that property into the name of both spouses as joint tenants, the property will
pass directly to the surviving spouse upon the death of the predeceased
spouse.
After doing an inventory of the assets belonging to each
spouse and to the couple jointly, you should meet with a qualified attorney to
discuss an estate plan. One of the most,
if not the most, important facets of
an estate plan is a Trust. The Trust can
hold property and help you avoid the probate process, meaning that your assets
can be distributed to your loved ones much more quickly after death. The Trust is administered according to the
terms of the Trust Agreement. This
Agreement can identify assets that are to be segregated specifically for your
children from a previous marriage. There
are also specific types of trusts that can be created to help you reach your
goals to provide for your children after you pass away.
Estate planning for blended families is crucial and requires
spouses to be open and honest with each other regarding how each spouse would
like his/her assets to be divided.
Although it may be a difficult conversation to have with your new
spouse, talking about these issues and having a thorough estate plan can avoid
much heartache and bad feelings in the future.
