Second Marriages And Estate Planning: Concerns To Address
If your spouse has been married previously, it can have an impact on their estate when they pass away. This can affect you, the second spouse, in a myriad of ways if you haven't taken steps to plan out the estate beforehand. The following are some things that you need to consider when you are in a second marriage.
#1: Who has rights to the retirements funds?
For private pensions and retirement accounts, the person named as beneficiary has the rights to the account. Some accounts allow you to set multiple beneficiaries, while others will only allow one. Social security retirement survivor benefits are a bit more tricky. If the first spouse has not remarried, they can collect these benefits. The second spouse can also collect the full survivor benefit – as long as they are of retirement age. Any minor children are also eligible for benefits up to the family cap. To make sure everyone receives sufficient funds to live in the event of a death, it's important to go over all retirement accounts and set a beneficiary accordingly.
#2: Asset Division
This is where it can get tricky and a will is necessary. If there are children from both marriages, a fair division may seem like the best option. Yet, if one set of children are adults, while the others are still young and have more costs, like education, ahead of them, it may make more sense to leave more assets for the younger children. List each person from both marriages that you want to include in the will, and then list any special considerations for each person, such as college tuition or a wedding funds. This can help guide you in dividing your assets in a fair, even if not equitable, manner. You can then revisit this annually and update it as needed.
#3: Check the Signatures
It's important to make sure the right names are on everything, especially if the relationship with an ex-spouse isn't friendly. For example, make sure the house is only in the name of the current couple. If the ex is still named on the deed, they may be able to try and take ownership in the event of a death. The same goes for other assets, including cars, land, bank accounts, and investment accounts.
#4: Update Often
Meet with your estate attorney and update the will often. You should definitely plan for an annual review of your will. It is also a good idea to update it whenever there are any major changes in life situations, such as divorce, remarriage, children graduating college or marrying, or even the birth of a new grandchild. This way you can make sure that everyone is properly cared for and that your wishes are carried out.
For more information, contact Donald B Linsky & Associate Pa or a similar firm.