Not everyone marries once in their lifetime. Some people may marry for a second time (or more) in their own time. Reasons for subsequent marriages may differ from person to person. They may have gone through a divorce, lost their spouse to death, or for any other reasons that are their own.
Bringing your new spouse into your estate planning may be complicated. However, if you have children thrown into the mix, the matter may be a bit more complex than it seems. Understanding some of these important issues surrounding second marriages can help you with reshaping your estate plan. Here are some things to consider when you are planning your estate after entering your subsequent marriage.
What happens to my existing will upon divorce?
That is a valid question asked by many people after they have divorced. When you have successfully and legally divorced from your spouse, your existing will that includes them will no longer be valid. That existing will is automatically revoked upon your remarriage to your new spouse – if you ever remarry, that is.
The only time and exception when that will “remains valid” is its inclusion of a “contemplation of marriage” clause. However, it does not mean that the will is entirely invalidated after your divorce. It just means that you will need a new will in such circumstances.
Restriction on your spouse’s rights
You will have substantial discretion to determine the restriction on your spouse’s rights. It may involve naming someone else other than your spouse to be the trust or trustee. You may quite likely choose one of your children to be the trustee instead of your spouse. In other options that you have, you may want to allow your spouse to receive income from the trust property but disallow them from being able to spend on the trust principal.
If you own real estate, it is understandable that you will want to stay in the house with your spouse from your second marriage. At the same time, you may also feel strongly that you will want the house to belong to your children from the first marriage when your spouse has died.
You can have that done by putting the estate in a trust that allows your spouse to use it but disallow them from selling it. You can also include clauses about whether your spouse can rent the house and peruse the rent income generated from it.
Usually, it is spouses from subsequent marriages who create these types of trusts. It may or may not mirror each other. Imagine if each spouse leave their half of the house to their children, the children from the 2 different marriages may need to work out some ways to divide its values after the parents have passed on. The children may or may not know or trust each other. In such situations, it can lead to many complications in the near future.
What can you do in such situations?
Choose a trustee. With any trust, a trustee can have substantial authority. Trustees can help to manage the property in trust and ensure that your spouse is complying with the restrictions on their use of trust property. They can also determine whether payments to your spouse from trust funds are appropriate.
You will understand that your spouse and children may have fundamentally different goals and needs along with conflicts that may be unavoidable. At the same time, retain a lawyer to help you make the trust documents as clear and fair as possible. In the end, the final decision is yours to make.
Getting a divorce is already taxing enough. To have to rewrite your will to fit in the needs of your ex-spouse and your new spouse can make things a lot more complicated. To make things easier for you, appoint a trustee – someone you can trust – to manage your estate easier for you. That way some of your worries regarding estate planning will be put to sleep.