Whether you are getting married now or you are considering it, you must set up protections for your assets in your second marriage. Otherwise, you could have assets go to the wrong family members, which only creates more issues for the loved ones you leave behind.
First of all, even if you have not officially tied the knot, you need to speak with an estate planning attorney. Also, you do not need a previous estate plan in place. And if you do not have one, now is the perfect time to start one – especially as you enter into a second marriage.
As you plan out your nuptials, here are a few things you need to do as part of your due diligence:
Review Past Estate Plans with Previous Spouses (If Any)
If you do have a past estate plan with a previous spouse, then you must review your wills, trusts, and any beneficiary designations (such as those tied to your insurance or retirement accounts).
Now, you must also review any divorce and child custody agreements you have and how they play a role in your past estate plan. Some divorce plans may have obligations where you must keep an ex-spouse as a beneficiary or give them a certain percentage of your estate (even if you were to remarry). If that is the case, you must consider it when creating a new plan involving your new spouse.
Also, you may not be able to update all beneficiary designations if you already have a previous spouse locked in from a divorce agreement.
Start Getting the Right Documents in Order
Next, you need to assess your long-term plans. Then, you will want to get a few documents in order to protect your assets in your second marriage and provide for your new spouse (and any children you may have) if you were to pass away.
Create a Prenuptial Agreement
You may want to consider having a prenuptial agreement in place. Not only will this protect your interests, but any assets that your spouse brings into the marriage can also have protections, too. You will want to discuss these financial issues ahead of time and create a plan with your spouse that you both can agree on.
Keep Your Assets before Marriage Separate
You both are likely to have some assets, and you will bring those into your marriage. Make sure there is a division between your assets and their assets before marriage. You can do so by keeping accounts separate for those pre-marital assets. Also, keep records of any assets that you had before the new marriage and any that may apply to a past marriage.
Set Up a Trust for Your Assets
You can also create a trust so that you can protect premarital assets from the second marriage. This also can allow you to protect any assets for children from a prior marriage who would benefit fully from those assets you had in your first marriage.
Asset protection trusts should be done with an estate planning attorney’s help, and you will want to make sure creditor and spousal protections are in place. You can also set up the trust in your child’s name and have them be the beneficiary of those assets.
Revise Your Will
Now is when you will need to look at your existing will and make changes. If your will currently lists your first spouse, you need to change it over to your new spouse’s name. You will also want to include any other beneficiaries, including children that you may have as part of your second marriage. Likewise, you will want to rename those who can make financial and healthcare decisions on your behalf if you are to become incapacitated.
Make sure you revisit your will every year after the new wedding, as you will want to make sure any new assets, children, or changes are reflected in your updated will.
Do Not Forget about Retirement Accounts
You will want to make sure that you change any beneficiary designations on your retirement accounts to either a child whom you want to inherit the funds or your new spouse. Most likely, your old spouse is named as the beneficiary and these designations outrank any will or estate plan you have in place. Therefore, you must go and update all retirement, investment, and even bank accounts where you have a beneficiary designation named specifically. Otherwise, the courts will honor the name that is on the document rather than the party in your estate plan.
Review Your Social Security Benefits
You may have social security benefits from an ex-spouse’s work record, which will change upon remarriage. Therefore, you need an attorney to review these and see how your new marriage may impact the benefits.
Think of the Tax Consequences
Estate planning with a second or even third marriage will require you to balance your assets and the tax consequences of having those assets. You may want to look to see if you have any gift or estate tax exclusions that you can use, and you will need to consult with an attorney if you have a high-value estate subject to estate taxes.
Every state is different; therefore, you want an estate attorney who understands how estate taxes will apply here in New York, including any assets you may have out of the state.
Do You Need an Attorney?
Yes, you should always consider hiring an attorney when it comes to a second marriage and protecting your assets. Second marriages make estate planning complicated, and if you have a divorce agreement from a previous marriage, it could complicate things further. Having an experienced, trained eye review your past agreements and make sure that everything is up to par with the latest legal requirements is critical.
Speak with an estate planning attorney to help protect your assets for your second marriage by contacting the Law Office of Andrew M. Lamkin, P.C., today. You can call our office or contact us online for more information.