When people come into a second marriage, there are often children involved. When both spouses have kids from previous relationships, it can be fun, but challenging. This is especially true in terms of asset protection.
After a divorce, your children should be your priority. While it is normal for divorced people to eventually remarry, they should not forget about their kids. However, many people have no wills in place. Those who do often leave everything to their spouse and expect that they will divide assets fairly. This is not always the case.
If your spouse has children, they will more than likely take priority over your children. That is just the way it works—flesh and blood seems to take precedence over marital ties. More than half of families in the United States are a product of remarriage. This means that it is more common for a child to be part of a blended family than a traditional nuclear family where the parents are on their first marriage. This also means that it is important to understand what you need to do to ensure that your children are protected in the event of your death. Here are some tips for blended families.
Do Not Rely on Your Will Alone
Wills are pretty basic and best for simple situations, such as a person leaving everything to their spouse. But when children are involved—especially children from other marriages—things can get a bit tricky. A will is not strong enough to prevent your spouse from taking all your assets and giving them to their children or—worse yet—a new spouse. Because of the risk of your children being disinherited, you may want to rely on a trust or other estate planning document. Talk with a lawyer to understand the best option for your situation.
Be Sure Your Children Get Assets
Do not leave everything to your spouse. He or she cannot be trusted to give any money to your children. This means that your children will have to wait until their stepparent dies—and even then, their stepmother or stepfather may not leave them anything. This can lead to a lot of tension in a family. Make sure to leave money and other assets to your biological children.
Consider a Prenuptial or Postnuptial Agreement
Anyone of any wealth status can use a prenup; it is not just for rich people. With this document, you can outline what will happen to your assets before you even get married. That way, there are no surprises when you die and your children get certain assets. Your spouse-to-be should know upfront that he or she will not be getting everything. It is not too late if you are already married. A postnuptial agreement offers the same benefits. It makes your wishes known before your death.
Consider an Irrevocable Life Insurance Trust (ILIT)
Another good option is an irrevocable life insurance trust. An ILIT helps eliminate the risk of disinheritance. If a person was afraid that their spouse would take all the assets and run, an ILIT is something they could use to put their mind at ease. In an ILIT, the trust owns a life insurance policy on your life. When you die, the proceeds from the life insurance policy can be given to your children as an inheritance. This allows you to leave everything else to your spouse. As an added bonus, the life insurance policy proceeds do not go through probate. Plus, since you elect the beneficiaries of the policy, your children and other family members will not be disinherited.
Choose a Trustworthy Trustee
Because you most likely will want to leave assets to both your spouse and your children, you should find someone to act as a mediator between the two. Do not rely on your spouse or children to act as honest trustees, since they are the ones whose assets are at stake. A good trustee will act as referee and make the right decisions about asset distribution. You may want to choose a trusted friend or another family member (such as a sibling). You may also want to consider a financial advisor.
Consider That Your Spouse May Remarry
After you are gone, your spouse may move on and remarry again. This is something you will have to deal with, whether you like it or not. There is nothing you can do to prevent that from happening, However, there are steps you can take to ensure that your assets do not go to the new spouse. Use the right kind of trust to protect your assets. Your lawyer can help you find the right plan for your situation.
Do Not Neglect Health Care Decisions
While most discussions about estate planning tend to center on asset distribution, you should also think about who will make your health care decisions. Choosing the right person to serve as your health care advocate is essential. After all, if you are incapacitated, the person will literally have to make a life or death decision. Make sure your wishes are known. Do you want to live as long as possible? What criteria needs to be in place? Keep in mind that fights about hospital visitation are common between spouses and stepchildren. Will one cut off the other? Is there any way you can prevent that from happening now?
Seek Legal Help
Dividing assets fairly can be a challenge when new family members come into play. If you die, will your spouse treat your children fairly? What will you do in regards to your spouse’s children?
Estate planning is crucial in a second marriage. Get assistance from Broward County divorce attorney Scott J. Stadler. He can help you with your assets after a divorce. To schedule a consultation, fill out the online form or call (954) 346-6464.