11th Aug 2016
Second chances can bring a lot of joy, especially in the context of getting remarried. In fact, blended families now outnumber traditional families, according to the U.S. Census Bureau. This is not just because of rising divorce rates – our longer life spans mean that many more people are outliving their spouses and remarrying. However, second marriages bring with them unique challenges. Now, not only do you have to take into consideration the needs of your new spouse, you also have to consider the needs of your children from your previous marriage and possibly the needs of children from your second marriage.
When it comes to blended families, mistakes made by not planning properly often have immeasurable costs. Below are a few common mistakes to avoid:
Mistake #1: Not updating your documents
Far too many people complete their estate planning documents and then never think about them again. This is not a good idea for anyone, as Estate Planning documents should be updated at least every 5 years, but for those who remarry and have children and stepchildren, the results of ignoring your estate planning documents can be disastrous. Significant events in your life, such as remarriage, could alter the way that you originally meant to apportion assets in your estate planning documents. The only way to ensure that your estate plan truly reflects who you are, what you care about, and what you have today is to have your documents reviewed and updated frequently.
Mistake #2: Not considering the feelings of everyone in your family.
Many of us don’t realize just how sensitive family members can be until it comes to estate planning issues – especially when it involves children and stepchildren in blended families. Even if family relations are good now, that quickly and dramatically changes when a biological parent dies and leaves all of his or her assets to a stepparent — which happens all too frequently. This can happen through poor planning and often through lack of planning, such as owing everything as joint owners with right of survivorship. This is why you must plan these sensitive matters carefully. The first step is to have an honest conversation with your new spouse about your existing finances, goals for the future, and how you expect your assets to be distributed — if you die before your spouse and if you die after your spouse. These conversations can be difficult and emotionally-charged, but they will reap innumerable rewards in the long run. Since your children are adults, you may also want to include them in these discussions so that everyone knows what to expect. It is prudent to meet with an experienced estate planning attorney, such as myself, prior to remarriage to assess your options.
Mistake #3: Choosing the wrong person as a trustee.
The selection of the trustee is one of the most important aspects of properly planning an estate of a remarried spouse.
The surviving spouse of a second marriage should rarely be the sole trustee. Even if the spouse is well intended, he or she will invariably lack the necessary neutrality.
The decedent’s children should rarely be the sole trustees of the spousal trust. Again the possibility for partiality exists and suspicions will ride too high for effective trust administration.
A trusted family friend may be a good choice, but unfortunately, the trustee will be faced with difficult choices and extreme pressure by the beneficiaries, so even a good friend may refuse to continue to serve as trustee under such pressure. Often the best bet, especially if the estate is sizeable, is a professional trust company.
The Importance of a Prenuptial Agreement
Anytime people are entering into a second (or subsequent) marriage, I strongly recommend a prenup. Although not always as strong as using trusts, prenups can pave the way for good estate planning.
Many people think of a premarital agreement as only dealing with what happens in the event of a divorce. However, the most important reason for a premarital agreement is to determine how your estate will be distributed if one of you dies during the marriage, especially if your marriage becomes a long-term marriage (which, of course, is the intended goal of all marriages).
Even if you have already completed an estate plan of your own, a new marriage typically calls for significant changes to your plan.
Although both parties to a new marriage have the right to hire separate attorneys in connection with creation of a premarital agreement, many couples prefer to go through this process together, via mediation, in order to minimize the expense and avoid the adversarial nature of being represented by two separate attorneys. The advantages of having two separate attorneys is that both parties both receive completely independent, private, and confidential advice. By going through mediation in an effort to develop a written agreement and estate plan, you will be giving up these advantages. If you choose mediation, the purpose of the mediation will be to attempt to arrive, in a cooperative and informal manner, at a mutually acceptable agreement that resolves all financial and legal issues that may arise in connection with your upcoming marriage, your existing marriage, or your co-ownership of property.
Estate Planning is Important for ALL Families
With advance planning, each person, regardless of their family situation, can retain the income and assets it has taken a lifetime to accumulate and the peace of mind that the needs of their child(ren) and the needs of their spouse will be adequately and properly addressed. If you or members of you family have not done Incapacity Planning or Estate Planning, or if a loved one is beginning to need more care than you can handle, please contact us as soon as possible to make an appointment for a no-cost initial consultation: