Second Marriage – Special Planning Issues
In a second marriage, things may be a little rocky with your children from your first marriage and you want to make sure your spouse is protected from any trouble. An alternative scenario may be that your highest priority is to make sure your children inherit your estate and your spouse wants to do the same for his or her children.
However, the most common goal in a second marriage is that you want your spouse’s needs to be met, and then if any assets are left over after your spouse dies, you want your assets to go to your children – not your surviving spouse’s new spouse or children.
Protecting Both Your Spouse And Your Children
If you want to take care of your spouse but make sure your children also inherit, one way to meet both priorities is to use a trust to take care of your spouse. The Trustee in your trust, will have to follow the instructions you have written into your trust. When your spouse has passed away, the Trustee will give whatever is left in the trust to your children, or to whomever you want to receive your estate. Even if your spouse has remarried, he or she cannot leave your trust assets to his or her new spouse or to your spouse’s children, instead of to your children.
Who Should Be Your Trustee?
There is one practical problem with a trust for your spouse – who will be the Trustee? If your spouse is the Trustee, your spouse may decide he or she “needs” all the assets in the trust. If your child is the Trustee, your child may decide your spouse has no need for any of the trust assets.
Another option is for a bank trust department to be the Trustee. But bank trust departments often want at least $500,000 of assets in a trust for the bank to be willing to serve as Trustee.
Easy Solution Leaves Children Vulnerable
In a second marriage there is no easy solution which will meet your goal of protecting your spouse and your children. Many couples throw up their hands at this point and decide they will each do a will that says “if my spouse survives everything goes to my spouse and if I survive my spouse, everything is to be divided equally among all of our children”.
The problem with this approach is that if your spouse survives you by very long, your spouse will often develop different loyalties and then do a new will, leaving your children out, in favor of their new spouse or their children from a prior marriage.
There is no easy answer for second marriage estate planning. The critical thing is to deal with it rather than to avoid the issue because it is difficult. It is especially important, if you are in a second marriage, for you to think through your options with a knowledgeable and experienced estate planning attorney who can help you examine the pros and cons of each approach.
Elizabeth A. Perry, a member of the National Academy of Elder Law Attorneys, has been helping Clark County residents with their estate planning needs for over 20 years. Her practice emphasizes wills, trusts, probate and Medicaid planning. You are invited to call her to schedule an appointment or sign up for a class at (360) 816-2485. ©Liz Perry 2014
(The above should not be construed as specific legal advice and is intended for general information purposes only)