If you have a new spouse, you may need to review your estate plan to match your current circumstances. Your previous will or agreements may no longer reflect how you want your assets divided between your new spouse, children from a previous relationship, and other loved ones.
This does not mean you have to choose between protecting your spouse and providing for your children. Instead, you need an estate plan that accounts for your new family structure and outlines who should receive what, when, and under what conditions. Here is how a second marriage can change the structure of an estate plan.
Incapacity Planning Needs to Be Reconsidered
Your estate plan should address more than what happens to your assets after death. It should also explain who can make medical and financial decisions for you in case you are incapacitated.
After a second marriage, you may prefer the new spouse to have some decision-making authority over your finances or make every medical decision on your behalf. You may also want to involve adult children or other family members in certain decisions.
Review documents such as your financial power of attorney, medical power of attorney, and advance healthcare directives after remarriage. Make sure the people named in these documents understand your wishes and their responsibilities.
Financial Planning May Need to Change
Your financial obligations may look very different after a second marriage. You may purchase property together, combine finances, take on joint debts, share a mortgage, or become responsible for each other’s financial needs.
These changes can affect your estate’s value and how assets are eventually distributed. For instance, outstanding mortgages and loans, taxes, and other obligations will be addressed first when determining what your beneficiaries are likely to receive.
Reviewing these issues as part of your overall estate plan can help you make decisions based on what you actually own, owe, and want to preserve.
You May Change Beneficiary Designations
Certain assets, including life insurance and retirement accounts, often pass to the person you name as beneficiary, without considering what the will says. This means your outdated designation could send an asset to someone you no longer intend to benefit.
For example, you may have named your former spouse as beneficiary of a life insurance policy or retirement account. After remarriage, you may want your new spouse to receive those assets instead, or you may want some assets to pass directly to your children.
As such, review each beneficiary designation as part of your remarriage estate plan and consider both primary and contingent beneficiaries.
Your Spouse and Children May Need Different Protections
Your spouse and children may have different financial needs and expectations, which can make estate planning more complicated. For instance, you may want the new spouse to have financial security if you die first while also wanting to preserve certain assets for your children from a previous relationship.
Depending on your circumstances, you may use separate inheritances, trusts, life insurance, property arrangements, or other planning strategies to provide for your spouse while protecting assets intended for your children.
It Can Trigger Multiple Estate Plan Reviews
Your circumstances may change again through the birth or adoption of a child, purchase of property, death of a beneficiary, divorce, changes in your finances, or other major life events.
Each change may affect who inherits your assets. Consider reviewing your estate plan periodically to ensure every detail reflects your current wishes.
Let Us Help Create a Structured Estate Plan for Your Blended Family
At Michael F. Kanzer & Associates, P.C., we can help you evaluate your existing estate plan and make appropriate changes after remarriage. This may include settling disputes, ensuring the needs of children from a previous relationship are met, protecting certain assets, or coordinating different estate planning documents. Contact us today to discuss your estate planning needs.