How Can Remarriage Affect Your Estate Planning?

Divorce is more common now than it was in the past, as is remarriage. Depending on how long a prior marriage lasted, the former couple may have engaged in certain levels of estate planning together. When that is the case, it is important to understand how a subsequent marriage can impact the estate planning from a prior marriage. If you or someone named in your estate planning documents has remarried, there are several major issues that you should be aware of as well as steps you should take to ensure your estate planning continues to be appropriate for your current situation.

 

Understand How Your Existing Estate Plan Will Operate If Left Unaddressed

First, understanding and reflecting upon your current estate plan is essential. Most states’ laws assume that a divorced spouse does not want their former spouse to inherit anything from them. So even if a will, a trust, or a life insurance policy names a former spouse as a beneficiary, there is a high likelihood that the law will prevent the named ex-spouse beneficiary from receiving the distribution from the deceased ex-spouse’s estate.

 

But be careful! This is not true in all states. Thus, regardless of what your existing estate plan says, you must be diligent in reviewing it, as well as beneficiary designations for your life insurance policies and retirement accounts, to ensure that an ex-spouse is no longer named as a beneficiary unless the terms of your divorce settlement require it. In addition, if you still want your former spouse to benefit from your estate in any way, speak to an attorney to ensure that your objectives will be met even if your state has a statute that would prevent it. It is also wise to review your divorce decree to check whether it contains a court order to retain an ex-spouse or minor children as named beneficiaries on a life insurance policy.

 

Just as important, if you want your current spouse to be a beneficiary of your estate planning or insurance policies and retirement accounts, you should update those beneficiary designations. On the other hand, if you wish to designate other family members instead of your current spouse as beneficiaries, you need to update your beneficiary designations in your estate documents and financial records accordingly.

 

Similarly, if you are still assuming that you will inherit or be entitled to some money and property or benefits from a former spouse, determine whether those assumptions remain true. Often, remarriage will impact your ability to qualify for certain government and pension benefits such as Veteran’s Administration benefits, Social Security benefits, or even survivor’s pension benefits from a deceased spouse’s employer. If those assumptions are no longer accurate, be sure to take that into consideration when updating your estate planning documents.

 

How Does Your Current Spouse Factor into Your Estate Plan?

Perhaps you and your current spouse have decided to take a “what’s mine is mine, and what’s yours is yours” approach to property. If that is the case, it is crucial to understand how your state’s laws handle property division at the death of a spouse. Even if you have completed your own estate planning with provisions designed to keep your property separate from your spouse so that it will pass directly to your children, grandchildren, or others, including charities, most (but not all) states have default laws to ensure that a surviving spouse is not completely disinherited. These laws (typically referred to as intestacy, elective share statutes or community property rights) can significantly disrupt even the most carefully drafted wills and trusts. Without a pre- or postnuptial agreement in place in which both of you agree how property should be distributed upon the death of one or both of you, your efforts to leave your property to someone other than your current spouse may be seriously frustrated.

 

On the other hand, assuming that you do, in fact, want to ensure that your surviving spouse receives some (or even all) of your property, it is equally important that your estate planning documents clearly communicate your intent. By making your intent clear, you can preserve a good relationship between your children from a former marriage and your new spouse. When children understand what your intentions are and why you are dividing property in a particular way, their assumptions about why their stepparent is receiving, for example, the family home, can be corrected. 

 

When Beneficiaries and Fiduciaries Remarry

Remarriage can disrupt your estate planning even when you are not the one who remarries. Sometimes, a beneficiary remarries after you have named them in your legal documents. If the new marriage is rocky because the new spouse is financially unstable, at risk for lawsuits, or if the marriage appears unlikely to last for very long, it may be time to review the provisions of your estate planning. In such a case, you may want to specify that any inheritance that passes to your beneficiary alone must be held in an ongoing asset protection trust for their benefit. Such language can prevent the inheritance you leave the beneficiary from being attacked by their spouse’s creditors or even from being divided as marital property in the event of a divorce.

 

A related issue can arise if you have named a married couple as guardians for your minor children if something happens to you. For example, suppose you named your sister, Shelly, and her husband, Ron, as guardians for your minor children if you die unexpectedly. You have chosen them because they share your values and together would be ideal guardians for your children. Further imagine, however, that Shelly and Ron divorce, and both remarry second spouses who are nice people with shared values. If you fail to update your estate plan and revise your guardianship nominations, the court may have a very difficult time determining who should be your children’s guardian. This situation could lead to a contentious court battle over their custody, particularly if the children were also the beneficiaries of a significant amount of property from a life insurance policy and both Shelly and Ron feel that the other is interested in the guardianship only because of the money associated with your children’s care.

 

We Can Help

We hope the above examples have underscored the point that remarriage is a significant enough life event that you should work with your estate planning attorney to carefully update your estate documents to reflect your current situation and intent. If you need help thinking through these various considerations for your own circumstances, please contact us at (614) 389-9711. We have the expertise and experience to help ensure that your estate plan will work for you and your family exactly as you intend.


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