Census data shows that roughly four out of 10 marriages involve a spouse who has walked down the aisle at least once before. While your focus may be on making a blended family work, there are other concerns such as, how to protect assets you already own, how you can provide for children from a previous marriage, and how to handle joint assets going forward that often take a backseat to daily life.
Should you die, do you want your current spouse to be able to stay in the family home, or do you want your children from your previous marriage to inherit the property? What if the answer is both? While you and your new spouse may be childless now, what happens if you have children together in the future?
We often see second marriage estate planning take one of two extreme paths: either new spouses put off estate planning until it is too late, leaving an ex-spouse named in wills and on beneficiary forms, or newly minted couples who rush to get all assets put in both of their names only to find out years down the road that they unintentionally disinherited children from a previous marriage. Before you make an appointment with an estate planning attorney to draft up a new will, consider sitting down with your financial adviser first.
Financial planning is an overarching process, taking into consideration daily short-term needs, long-term retirement, and intent for your assets once you are gone. Instead of just updating existing documents and helping you make sure your beneficiary designations are up to date, the conversation starts with what is your intent for your wealth once you die. You will still need an estate planning attorney to draft wills and trusts; however, your financial planner can help you create an equitable divide—especially in situations where one spouse may have considerably more assets than the other, minor children from a previous marriage stand to inherit assets, or if you are already drawing on retirement assets. A financial planner can also help you implement a gifting strategy that would allow you to provide for children from a previous marriage while you are still alive.
Many assets transfer by beneficiary designation or by how they are titled; therefore, they are not affected by a will. While everyone in the family may get along today, you cannot assume that those feelings will not change several years from now. Should you pass away, your surviving spouse could again remarry, and the assets you intended to pass down to your children could end up in the hands of a stranger.
By working with both a financial adviser and estate attorney, you can likely create an estate plan that will benefit your surviving heirs while minimizing estate taxes and perhaps the chance that your heirs end up in court fighting over assets. A financial planner can help you define the intent for your wealth, while the estate planning attorney can help create the tools to see your wishes through to fruition.
If you have questions on how you may want to structure your estate plan, the experts at Henssler Financial will be glad to help:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166
Listen to the May 14, 2022 “Henssler Money Talks” episode.
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