How does estate planning change with remarriage?
New Yorkers who get remarried for the second, third or subsequent time should make estate planning a priority.
After the loss of a spouse to death or the end of a marriage to divorce, New Yorkers who find happiness again with a new partner have much to look forward to. However, when before entering into a new marriage, it is important for people in this position to stop and review their future plans not just for their lives but for after they die as well. A remarriage is an important life event that requires a review of estate plans or the creation of some if none existed before.
Managing existing obligations
Many people who have been married before may have obligations to former spouses or to children from earlier marriages. This may include monthly spousal or child support payment but may also extend beyond this. A person may also be legally required to keep a former spouse listed as the beneficiary of a life insurance policy, for example. Fidelity Investments recommends these things be discussed with a new spouse and considered when making future plans.
Delineating separate and joint assets
Anytime a couple gets married, there may be some blending of previously separate assets into a joint marital estate. If the spouses each have children from prior marriages, for example, this may provide a reason to keep some assets separate. Doing so can help make sure each person’s biological children receive specific things or money after the related parent dies. Having these plans identified before the new marriage happens may prevent conflict between step-siblings or stepchildren and stepparents if one parent dies.
Surviving spouse rights
According to the Financial Planning Association, surviving spouses may have rights to things that some families are unaware of. Taking the time of creating a thorough estate plan can avoid some unpleasant surprises after a person dies. This process should include the development of a will or a trust but also more than that.
Consideration should be given to retirement account beneficiaries and life insurance beneficiaries. Spouses should identify who will have the power to make decisions on their behalf should they become incapacitated. Advance health care directives and powers of attorney are just as important in the overall estate planning process as a will or a trust.
A NY spouse has a right to inherit a portion of their spouse’s estate upon death. This may sometimes conflict with the parties wishes. A specific waiver of this right and/or a prenuptial agreement/postnuptial agreement may be required to ensure that the wishes of the parties are implemented properly.
Many inheritance decisions have tax implications for an estate or an heir. These should be evaluated and direct the decisions made just as much as should the desire for certain things to go to certain people.
New Yorkers should always work with an attorney when developing their estate plans. With the wide range of issues to consider in the process, getting professional input is the best way to avoid overlooking important details.