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The Do-Over: Your Guide to Estate Planning in a Second Marriage

Mass Media

second marriageAmong people 35 and over, the majority of people who get divorced go on to remarry.

The numbers are also growing: 57% of people aged 35 to 44 whose first marriages end go on to enter a second marriage, and 63% of those 45 to 54 do the same. Even half of all people 65 and older tie the knot again. The trend is more prevalent among those 55 and older, but singles under 35 are likely to couple up again, just perhaps without signing the dotted line.

When you remarry, you need to update any estate plans you had with your first spouse. If you don’t and something happens, your survivors could wind up seeing real – and expensive – complications in probate court.

What changes when you enter your second marriage? Keep reading for an introduction.

1. Consult Your Divorce Agreement

In most states, including South Carolina and Georgia, spousal support ends with the remarriage of the supported spouse or death of either of the former spouses. So spousal support generally isn’t a concern for your estate.

However, there may be other financial or contractual obligations lodged in there, especially if you own property together that you maintained without splitting.

Start any second marriage estate planning by including any necessary provisions from the first marriage. These either need to be resolved in advance or written into your estate to avoid complications during probate.

2. Talk With Your Children

If you have children from both marriages (biological, step-children, or adopted), you need to update your estate plan to reflect all children.

The estate should include both guardianship issues (if your children are under 18) and long-term financial goals for providing for your children.

As with the divorce agreement obligations, these need to be hashed out with both your current spouse and your ex-spouse when possible so they can plan accordingly too.

3. Decide Whether to Combine Your Estates

Your estate has changed dramatically since your divorce. It no longer includes your ex’s property, and it could now feature your current spouse’s assets.

It’s at this juncture that you need to decide whether to keep the assets you both brought into the marriage separate or to join them. South Carolina, like most states, is a marital property state. As a result, your spouse has a right to all the real and personal property you accumulate during your marriage, but not before it.

Deciding whether to combine your estates is difficult compared to the decision during your first marriage.

You might be significantly older than you were when you entered your first marriage, which means one of you might bring substantially more into the union after several years of a successful career.

The issue of combining assets impacts childless couples, but it tends to affect couples with children from a previous marriage most. You may find you prefer to keep assets aside to save for your biological children. It’s not uncommon to want to set aside the assets you brought into the union for your children outside it.

It’s Okay to Leave Pre-Marriage Assets out of Your Married Property

Why? Because bringing them into the estate risks losing those assets for your children.

A good example is when a newly married couple moves into the home purchased by one of the spouses before the second marriage.

If you’re the owner and decide to bring it into the estate, then your new spouse gets the house if you pass away first. If they have the right to the home, they can do as they please with it, even if it goes against what your will says.

For example, they can leave it to their children. They have a legal right to do, so even if you wanted to pass it on to yours.

This makes second marriage estate planning more complicated: the plan you might’ve chosen with your first spouse – with whom you share children – won’t work because you don’t legally share the children.

Similar issues arise with retirement plans and life insurance. If you name your new spouse as the new beneficiary, they can then pass it on as they see fit in their estate.

These are difficult discussions to have, but you must make them early. The conversations become even harder if you’re not there to broker them and express your wishes.

However, it’s also important to remember that the reverse can also be true. If you don’t update your estate, you could leave your spouse and any children from your second marriage out in the cold, even if that wasn’t your intent. It’s very difficult and expensive for them to fight these things in probate court.

4. Consider Remarriage Protection

Just as getting married once doesn’t automatically guarantee a second marriage, neither does your second wedding mean you’ll get married a third time. But things don’t always go as we plan. If your second marriage ends pre-maturely – either through divorce or death – then the estate becomes even more complicated, particularly if the surviving or ex-spouse remarries.

Think about all the intricacies of restructuring your estate above. Now, consider your first marriage twice removed from your estate.

Remarriage protection doesn’t just apply to second marriages; all couples benefit from it.

In most cases, remarriage protection involves a trust, which provides protected assets for each spouse’s children. However, it can also include other options. An estate attorney can help you work through the possible options to prevent the complexity that comes with commingled assets.

A Second Marriage Always Requires Estate Updates

Whatever your circumstances and whatever your assets, a second marriage always requires at least some estate paperwork, if only to switch your life insurance beneficiary.

Although the conversations aren’t easy, it’s essential to work them out early and to communicate with all parties involved. You also shouldn’t feel bad about wanting to protect the assets you want to give to your children from a previous marriage. It’s both reasonable and smart to take steps that ensure your estate is executed according to your wishes.

Do you have questions about updating your estate? Share your questions with us and start your second marriage off on the right financial footing.

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