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Estate Planning For a Second Marriage

Pre-planning protects both parties in a second marriage.  Love can be a many-splendored thing, but when it results in a second marriage, careful estate-planning becomes a necessity.

Second marriages are a blending process, often of children and assets.   Prior to marriage, it is important to discuss your intentions concerning those assets and your heirs.  While it is hoped that newlyweds will live out their lives in good health and harmony, that is not always the case.

And if the worst does occur, it is important that certain protections be in place to ensure not only that all parties are treated fairly, but also that the spouse, children, and the assets brought to a marriage, are legally protected.   Failing to take these steps prior to marriage could result in a loss of financial support, the breakup of an already blended family, and loss of rights to survivorship and inheritance.

Among the issues that should be considered:

  • Upon your death, do you wish your premarital assets to be distributed to your heirs, your new spouse, or a combination of both?
  • Is there a possibility that one spouse may inherit substantial assets intended for distribution to their blood heirs only?
  • Does either party intend to adopt the children brought to the marriage?  If so, how do you wish for adoption to affect the inheritance of naturally-born children?   Will adopted children have the same rights by inheritance or will they be excluded?   If the new spouse does not adopt the other spouse’s children, how does this impact guardianship of those children should their legal parent die?
  • Will children born to the marriage have different rights to inheritance and testamentary support than children brought to the marriage? How will you provide for the continuing financial support of your children upon incapacity or death?
  • If that second marriage fails, or is otherwise dissolved, what will be considered marital assets for the purposes of a property settlement?  How will that divorce affect rights granted by will or trust?   Will any support obligations or other financial arrangements be required?
  • Is either spouse bringing a corporate asset, such as a small business, to the marriage? Is there a current succession plan in place for that business?  Should that succession plan be altered in light of the marriage?  Does that business contribute to financial support of the parties?   Will that support continue to the surviving spouse upon death of the business owner?  How will a divorce impact the business?
  • Are there any testamentary documents of others in place, such as a will or trust, which may be impacted by a marriage or subsequent divorce?
  • Does any prior spouse, or child of a prior spouse, have any claim to your assets or support? How will remarriage impact those claims?
  • Are there assets inherited from a deceased spouse that have been brought to the marriage, and how are those assets to be distributed upon the heir’s death?

Marriage among those approaching or in retirement creates additional issues:

  • How will disability, social security, life insurance, or retirement benefits be impacted by remarriage?
  • What steps must be taken to protect the new spouse, as well as other intended beneficiaries? For example, will it be necessary to purchase a life insurance policy naming the new spouse as beneficiary to ensure continuing financial support upon the other’s death?   Are there any changes that must be made to the primary beneficiaries of existing life insurance policies, annuities, or trusts?
  • Is it necessary to establish the testamentary capacity of the parties to ensure that estate planning documents survive a legal challenge?
  • Are there any continuing financial obligations on the part of a deceased spouse, such as payment for a cemetery plot or support of a family-sponsored charity, that one party wishes to continue to fund with his or her assets, either during the marriage or after death?

The commingling or separation of some assets are clearly delineated under California law, while others may be left to the discretion of the spouses.  The role of an estate-planning attorney is to ensure that the wishes of the parties are clearly stated in legal documents.

While these issues may be difficult to discuss, once decisions are made, there are many tools in the estate planning toolbox to ensure all are protected, including prenuptial agreements, wills, trusts, and financial instruments, such as life insurance, IRAs, and annuities.

It is very important to have these documents completed and legally witnessed prior to marriage.  This will ensure legal continuity between preparing for marriage, the blending of families and assets, and the actual wedding day.