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Second Marriages: Estate Planning Concerns
by Phil Craig
© Phil Craig, All Rights Reserved
http://www.LivingTrustSecrets.com
One of the biggest areas of dispute in estate planning
is with second marriages. Here is a question I received.
I've changed the facts around so that I am not giving
specific legal advice.
Phil,
My dad, age 87, is getting married soon so that his new wife
will be eligible for social security benefits on his earnings.
In his living trust he had made arrangements for me, my sister,
and his lady friend. What changes for us, his kids, when he
marries this lady? What do we need to know?
Wow, what a predicament.
My first reaction is to ask if his father was entering into a
marital agreement (a pre-nuptial agreement, or pre-nup) before
the marriage. What a pre-nuptial agreement will allow is for his
father to maintain control over the use and disposition of his estate.
Without a pre-nuptial agreement, the laws of their state concerning
marital property will control.
What this means is that if his father dies after he re-marries and
fails to modify his estate plan, his new wife may receive statutory
claims or benefits from the father's estate (each state is different,
so it is critical to receive local advice).
Another area of concern is what happens if the father re-marries and
then the wife becomes incompetent? By getting married, the father has
opened up his net worth to the medical claims and needs of his new wife.
When I was in active practice and was consulted by a widowed client
who wanted to re-marry, I reviewed the rules concerning long term
health (nursing home rules and costs) with him. I showed him what he
would be responsible for if they were to re-marry. I'd say 8 out of 10
people I saw and went over this with decided not to re-marry after
learning the rules. They decided to "live in sin."
Another area of dispute I often saw was when the re-marrying parent
wanted to change his or her estate plan to provide for the new spouse.
This caused a lot of hard feelings. The children often felt that they
were entitled to the estate of the first parent to die and that it
should
not be held for the new spouse.
By providing for the new spouse, the re-marrying parent is putting his
children in a position where they are waiting for their "step-parent"
to
die before receiving what they felt is rightfully theirs.
So, think twice before re-marrying in your later years. Consult with
competent legal counsel and consider, at a minimum using a pre-nuptial
agreement. Consider the impact the new marriage will have on your
revocable
living trust and whether any changes are needed to your estate plan for
Medicaid or estate tax reasons.
Good luck and until next time,
Phil Craig
P.S. Did you
know you can search this site or the web for more Living Trust, Wills,
Estate Planning and Probate answers?
Click here!
Phil Craig is a licensed attorney and entreprenuer.
He started practicing law at age 25 in 1979.
He does not take on any more clients, but is
advisor to some of the biggest names in the internet
world. He shares his knowledge gained over the
last 25 years at his Living Trust Secrets newsletter site:
click here=========>http://www.LivingTrustSecrets.com
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