Many people who have experienced divorce choose to marry again in the future. While remarriage is a common occurrence, a divorced individual may not think to update their Will when they take a new spouse. If that person then passes away, their assets may be divided in a way that doesn’t necessarily reflect their current wishes and family situation.
If you’re getting remarried, you’ll want to keep your estate plan up-to-date to properly protect both your assets and your loved ones. Here are some estate planning considerations and steps to keep in mind.
1. Protect your spouse.
If you die without a valid, updated Will and have children from your previous marriage, Virginia’s intestate succession laws dictate that two-thirds of your assets — possibly including the house you and your partner share depending on how it was titled in the deed — may bypass your spouse and pass directly to your children. At best, your family may have to navigate your Will and divide the assets amongst themselves. At worst, your spouse may be left without the resources they need, if your children decide not to provide for your spouse or they force them out of your marital home.
To avoid this issue, you’ll need to write a custom plan that clearly outlines the proper distribution of assets to both your children and your new spouse. For example, you may write in a clause that gives your spouse a life interest to remain in your home for the rest of their life.
2. Protect your children from a previous marriage.
On the flip side, if you do update your Will to leave assets to your new spouse, you may have the expectation that they will use at least some of those assets to provide for your children (their stepchildren) after your death. However, making this assumption without explicitly stating how assets are to be divided can be a financial detriment to your children.
There are a few strategies that you can use to prevent any unwanted outcomes for your children from a previous marriage. Creating a revocable trust, which allows you to easily change instructions and assets during your lifetime, can give you the flexibility to make sure both your children and your current spouse are protected no matter what your circumstances may be.
You can also create a separate marital trust, which allows you to set aside assets specifically for your spouse rather than having an undesignated pool of assets to be divided amongst your spouse and children. This can ensure that both your spouse and your children have access to the assets they need, without worrying that either will be left in a difficult position.
In your marital trust, you can also instruct that all remaining assets in your trust pass on directly to your children when your spouse passes away, giving them further financial protection.
3. Consider a life insurance policy over marital trust.
Although a marital trust can be used to ensure both your spouse and children receive their share of your assets, funds can be depleted with life circumstances. For example, if your spouse suffers an accident or other health condition that leads to extensive medical bills, the funds will likely have to come out of the trust — leaving your loved ones with little to protect their financial interest.
To prevent this outcome, you can leave your life insurance policy to your spouse, while passing your funds and other assets to your children. This ensures that both your children and your spouse will be provided for after your death.
4. Update beneficiary designations.
While signed settlement agreement or final divorce papers may allow you to remove your ex-spouse as a beneficiary or executor of your estate, you will still need to manually switch the beneficiaries on your retirement account or any company life insurance plans. If you have a 401(k), your surviving spouse is set as the automatic beneficiary unless they state otherwise. However, life insurance and individual retirement accounts must be updated to include your current spouse and/or your children.
5. Contact an experienced estate planning attorney.
Estate planning can be complex, especially after a remarriage. An experienced estate planning attorney can help you navigate the process and ensure that your current spouse and your children receive their fair share of your assets.
The Law Office of Patricia E. Tichenor, P.L.L.C., is here to help you with all of your estate planning needs. Schedule a free virtual consultation to discuss your needs.