What is Fair in a Second Marriage, Regarding Estate Planning?

Divorce rates continue to be high across the United States, and recent polls have shown that marital separation rates are increasing in 2020 due to coronavirus-related stresses.

How many divorcees remarry? And, if and when they do, what does this mean for their estate planning?

First off, you want to make sure your children are covered. If you have children from a first marriage, and then enter into a second marriage, it is crucial that you have an updated Will that clarifies which assets should pass to your children – be it direct inheritances or by way of a protective trust. (The trust is recommended for helping your children avoid taxation, but that is another topic entirely.)

Here are four key questions to ask if you find yourself in a second marriage:

1. Who Are Your Beneficiaries?

By beneficiaries, we refer not only to the Will, but to your accounts. 401[k] accounts are set to go to your current spouse – if you want to change that, your current spouse must legally agree to that change.

Other accounts, such as life insurance policies and retirement accounts, depend upon your designations. You designate the beneficiaries for each account. That designation on each account takes precedence over anything you state in your Will regarding those accounts.

2. Who Will Inherit Your House?

Each state has different rules regarding the transfer of home ownership. If you own the house as “tenancy in common” with your current spouse, then you can leave your share of the house to whomever you choose. If the deed is marked as “joint tenancy with right of survivorship” or “tenancy by the entirety,” then the entire property will belong to the spouse that survives – regardless of what is written in the Will.

Home ownership situations can be complicated, especially since the deed overrides whatever you may state in your Will.

3. Is Everyone Aware of the Plans?

Clear communication helps everyone. Explaining the contents of your Will to all potential beneficiaries should help alleviate confusion. Letting your current spouse, your previous spouse (if he or she is still alive), and your children understand your thinking will help the future executor of your Will carry out your intended distribution.

Answering questions is obviously not something you can do after you are gone. Addressing questions, and walking your beneficiaries through your estate plans, is not part of an easy or comfortable conversation. But avoiding the topic will only lead to potential division, disagreement, and conflict at a later date. Direct communication can avoid these problems.

4. Who Receives Which Belongings?

Specific belongings are often tethered to strong emotions. You likely have specific items in your possession that carry a great deal of meaning for your beneficiaries. Clarifying which particular items should pass on to which people can avoid conflict as well. Be specific when referring to these objects (or pets, or automobiles, or anything else). The more you can let your loved ones know that you are thinking of them, and that you want them to own specific belongings of yours, the smoother this painful process can be for them.

Losing a loved one is always a confusing and challenging course of events. Writing clear and expressive estate plans is one way of caring for your family. Choosing the language that communicates your love and care is a process that is worth your time and careful attention.