Nearly half of all marriages here in the United States end in divorce. Nevertheless, people often are willing to try and again with a new spouse. For couples with children from previous marriages, this can ideally mean a big happy family with the kids all mixing it up as if they were the Brady Bunch. This fresh start can be exciting, but it is still smart to create a new estate plan that reflects these significant life changes.
Priorities to address
One could never imagine Carol Brady losing touch with the boys if Mike died or sell Mike’s architecture firm even though he promised to pass it to the boys. Every family faces changes, even when they all get along, so it is good for the remarried parents to put their estate plans in writing. This can save a lot of additional heartache and frustration after a parent dies. Important matters to consider include:
- A simple will: Leaving the entire estate to a second spouse can be a mistake, particularly if there is a family business, property or other large assets that should remain with children from the previous marriage.
- Design a trust: Trusts can address all the details regarding control of the estate, such as supporting a second spouse or allowing them to live on land that goes to the biological children once the stepparent passes.
- Pick the right trustee or executor: Many will pick their surviving spouse, but these roles involve a lot of paperwork, a willingness to make hard decisions, and an understanding of finance. It may make more sense to hire a neutral third party or pick someone else able to handle probate or administer a trust.
- Medical power of attorney: This is someone who steps in when a parent is unable to make informed medical decisions on their own regarding treatment or life support. Spouses should have clear instructions in place to provide guidance.
- Remarriage: It is a good idea to outline protocols if a second spouse chooses to remarry – this could avoid the estate falling into the subsequent spouse’s hands.
- Pass assets to the children: It may make sense to give a business, property or money directly to the children after death. This may provide additional financial stability while they raise their families.
Things do change
Besides death and taxes, change is really the only other constant in life. A parent’s death often impacts a family’s dynamic, ideally bringing it closer but sometimes prompting disagreements that can end up in court. Estate plans can even address these far-fetched scenarios, ensuring that the family does not have to guess what a parent would have wanted.