Did you know that around 29% of marriages involve someone who was already married? Everyone deserves a chance at finding love again. Unfortunately, a second marriage can lead to some complicated legal challenges. This is especially true if the spouse, who was involved in a second marriage, dies.
When this scenario happens, a variety of inheritance problems with the first spouse can arise. As such, you should be aware of these problems so you can anticipate them in the event of the unexpected. In this article, we’ll discuss some of the inheritance problems that come with second marriages. We’ll also give you some advice on how to avoid them. Let’s get started!
What Are the Current Estate Laws That Affect Remarriages?
Unfortunately, there’s no easy answer to this question. That’s because different states have different laws when it comes to spousal inheritance. Unless stated in your will, some states automatically pass your assets along to your children instead of your current spouse. Others, like Maryland, have a spousal effect law that allows the current spouse to petition for up to half of the deceased’s estate.
As such, it’s important to check the state laws where you live to find out how the local estate laws will affect your spouse and potential children. If you need to, you should also plan a will to protect your loved ones in the unfortunate event of your death.
Five Common Second Marriage Estate Planning Decisions That Cause Inheritance Issues
It’s important to have a clear idea of what you want to be left to your spouse and children when you craft a will. That involves thinking ahead and making some potentially difficult decisions.
Ultimately, this might lead to some uncomfortable conversations. But, in the end, it’s worth it to sure that your estate wishes will be carried out accordingly. Here are five things you should try to avoid when planning your estate after a second marriage.
Making the Wrong Decision With Assets
When you enter into a second marriage, then you need to decide how your assets will be divided. There are two ways to do this: you can combine both estates or keep them separate. Joint assets will automatically entitle your current spouse to assets like the property you buy together, bank accounts, as well as stock options you might have.
Separate assets can be designated to certain parties, like kids from a first marriage. There is no right or wrong answer to this decision. It depends on each circumstance. Ultimately, it’s about who you want to have access to your assets in the event of your death. Nonetheless, it’s an important first decision that every newly married couple should discuss.
Not Considering a Prenuptial or a Postnuptial
If you’re getting married a second time, then you should consider the possibility of a prenuptial agreement. This is a legal document that discloses the full financial assets of both couples. It then goes into terms of how these assets will be divided in the case of divorce or death. Alternatively, you can also sign a postnuptial agreement after you’re married.
If you have children, then you might want to give copies of the prenuptial contract to your children. This will make it easier for them to access their inheritance. Ultimately, a prenuptial or postnuptial might not be for everyone. But, it’s a legally sound way to protect yourself from the unexpected.
Forgetting to Update Beneficiaries
Many people forget that the power of written beneficiary designations on their investment and life insurance policies. The written designation in the contract supersedes anything you put in your will. This means that if you want a child on your life insurance plan, but don’t list them, then they will be left out.
This is true even if you have it expressly written in your will. As such, you must update everyone you want to be included. This is especially true if you remarried. Some people forget to update and include their new spouse in the designation. In this scenario, it’s easy for the life insurance policy and investments to go to the old spouse who’s still listed.
Leaving Memorbialia or Heirlooms Out of the Will
Let’s say you own a vintage car that you want to be given to your children. If you don’t state this explicitly in your will, then it will likely go to your spouse instead. That’s not to say that they won’t be willing to give it to your children if they ask.
But, there is no legal guarantee that they have to. As such, if you have any memorabilia that you want to be saved for certain family members or parties, then make sure to include it in your will. The same goes for heirlooms like photographs, fine china, and old furniture.
Not Making a Real Estate Decision
You also need to decide what to do with any real estate you own. Do you want it to go to your children eventually? Or do you want it to stay with your current spouse? Remember that the title of the home supersedes anything in your will.
So, if your second spouse is on the title, but you leave the home to your children in your will, then the second spouse will get the home. One option is to let your spouse reside in it until their death. Then, it will go to your children.
Want More Content? Keep Exploring
We hope this article helped you learn more about common inheritance issues that accompany a second marriage. If you find yourself in this situation, then know that you’re not the first person. That means there are resources to help you plan out your future. This will help smooth out any potential problem and make the possible event of death much easier on loved ones.
As such, don’t put off any important estate planning. Did you enjoy this article? If the answer is yes, then you’re in the right palace. Keep reading to find more articles you’re sure to love.