Those with children from prior relationships must consider the impact of 2nd marriages on their children’s ability to inherit. About 50% of adults remarry within five years of a divorce, with 18% of blended families having at least one stepchild. Measures also reduce impact if you fall into the 60% category of failed second marriages.
Regardless of the positive attitude of your new spouse toward children from a prior relationship, planning for/protecting your children is a priority. Once a parent dies, if the entire estate goes to their new spouse, that person has total power over the assets. This may result in children being disinherited.
We will share tips on protecting your children and their inheritance, whether they are six or 60 when you remarry.
Numerous financial accounts require designating a beneficiary to receive the assets upon death. The primary beneficiary gets all funds in the account. If there is more than one primary, all primaries receive equal amounts.
Contingent beneficiaries receive funds only if the primary beneficiaries predecease them. You may designate your children as primary beneficiaries and your second spouse as a contingent beneficiary or vice versa.
After a divorce or becoming widowed, check all accounts to determine who you have as a beneficiary of the account. If you remarry, having the proceeds of all or most of these accounts go to your children is one way to secure an inheritance.
- Life Insurance
- 401(k), IRA or other retirement accounts
- Existing wills and trusts
Verify who you have as your durable power of attorney, the person on your health care proxy, and your safety deposit box. You don’t want your ex-wife in charge of live-or-die healthcare decisions while your second wife has no legal say in the matter.
Any legal or financial document that designates a person’s decision-making power or specifies beneficiaries must be adhered to, even if you have divorced that person.
Prenuptial and Postnuptial Agreements
These contracts determine the division of assets following a divorce or death. They specify the holdings of each person and the distribution of assets when the marriage ends.
Marital contracts ensure an equitable inheritance for both parties and children of prior relationships. You should discuss the advantages and disadvantages of having a marital contract as part of your estate planning packet with your estate planning attorney.
A prenuptial agreement must pass a three-part test pursuant to Scherer v Scherer, 249 Ga.635 (1982) to be enforceable:
- Proof that creation is not the result of duress, fraud, misrepresentation, mistake, or nondisclosure of material facts
- The prenup is not unconscionable
- That enforcement is not unfair or unreasonable
Anyone seeking to enforce the terms of a prenuptial agreement must prove the above. Failure to disclose assets or yearly income may fall under nondisclosure of material facts.
A postnuptial agreement is for people already married when they realize the need to protect assets. They may be necessary in a second or subsequent marriage to secure an inheritance for their children.
Postnuptial agreements must meet the same criteria as prenuptial agreements when seeking enforcement in Georgia. A full disclosure of assets is crucial to ensuring validity.
Wills/Trusts in 2nd Marriages
The individual assets each person brings into the marriage determine the best estate plan.
A will provides instructions for distributing assets after you die. This includes real property, personal property, and guardians for minor children.
Stepchildren do not have any legal inheritance rights to your estate, but your spouse does. Georgia law states that a surviving spouse may receive at least one-third of an estate; the remaining assets go to your children.
If the probate court accepts your will, your spouse receives what you designate in the will. You may leave your spouse out of your will, but they can request the court award them up to twelve months of support.
The Georgia intestate succession rules apply if you don’t have a will. This may leave your children less inheritance than you intend.
The standard probate process in Georgia is governed by Title 53, Chapter 5. A will becomes a public record, meaning anyone can visit the courthouse where the will is on file, pay a fee, and obtain a copy. The way to avoid having your assets become public records is to place them in a trust.
A trust avoids probate and keeps your assets private. The type of trust you need depends on individual circumstances.
A marital trust transfers all assets to your surviving spouse as the sole beneficiary of your estate. This secures your spouse’s future but may leave your children with zero inheritance.
A family trust allows you to designate the distribution of your assets among your surviving spouse, children, and any other beneficiaries you choose. You may also specify percentage allotments and the ages your children need to be before receiving their inheritance.
When appointing a trustee, many select their new spouse. If they do not have a strong, positive relationship with your children, this can create problems.
Select someone you can trust to act in the best interests of your children. If you are unsure of your selection, ask your attorney for suggestions or if they are willing to serve in this capacity.
The laws governing the validity of a trust are in §53-12-4 of the Georgia Code. While there are do-it-yourself wills and trusts available online, ensuring that your estate plan is valid is essential.
Estate Planning Is Tricky
Second marriages increase the importance of careful estate planning and the benefits of hiring an estate planning attorney. They will review your and your spouse’s financial holdings, offering options that protect both parties and their children.
Factors include children from prior relationships, your current spouse, children born of the second marriage, and any prenuptial agreements. You may have established businesses, significant retirement investments, real estate, significant debt, family heirlooms, or other items of value.
Hire an Estate Planning Attorney
Hiring an estate planning attorney ensures you have a legally binding estate plan. Rhodes Law Firm, PC has 35 years of experience, providing guidance in setting up your estate to reduce conflict risks and emotional distress of surviving family members.
Review these examples of why estate planning is crucial in 2nd marriages, then call (706) 724-0405 to schedule an estate planning consultation.