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Critter Corner: Making your Own Luck this St. Patrick’s Day!

Dear Hayek,

Happy St. Patrick’s Day! I’m feeling very lucky this year. I met the love of my life and I feel like the third time is the charm. We are getting married and blending our families. I do believe in luck, but I also want to plan. What are some estate planning steps we should take for our blended family?

Thanks!

Luke E. Mee

Dear Luke,

Congrats on your engagement! As the old Irish blessing says, “…may the wind be always at your back.” In other words, may good things happen for you!

When it comes to remarrying, if there are children or other heirs involved, you should consider carefully what will happen with your money and possessions when you die. Therefore, it’s vital for you to consider doing estate planning at this time, or updating your existing estate planning documents to reflect your new wishes! These are some things to keep in mind:

  • Update or create your trust.  Having your assets in a trust prior to marriage will typically protect those assets in connection with a new marriage.
  • Consider a prenuptial agreement: Anytime people are entering into a second (or subsequent) marriage, I strongly recommend a prenup. Although not always as strong as using trusts, prenups can pave the way for good estate planning. Learn more
  • Make sure your current spouse and not your ex-spouse is listed as beneficiary: It’s important to review all of your beneficiary designations on all of your accounts to ensure that each of your accounts will go directly to the intended beneficiary, which ideally should be your living trust, which is a critical estate planning tool for almost everyone. Beneficiary designations naming individuals should generally be avoided, for many reasons. Click here to read my recent article on this subject.
    • You should go through all of your financial accounts — checking, savings, investment accounts, retirement accounts, etc. — to make sure that your beneficiary designations reflect your wishes.
  • Consider naming your children as beneficiaries (either directly or through your trust). You may want to designate your children as primary beneficiaries of certain accounts so they will receive specified assets upon your death, even if the remainder will be going to your new spouse.
  • Update your power of attorney and your advanced medical directive — to make sure that it’s your current spouse and not your ex who is charge of making financial and medical decisions in case you become incapacitated.
  • You probably don’t want your ex-spouse to get your home, either. Be sure to change that and other things in your estate planning documents. Many of these things are typically addressed in a Property Settlement Agreement with your former spouse.
  • Be specific about what happens to the house: If your new spouse moves into your house, you may want your new spouse to be able to live in the house, if you die first, for his or her remaining lifetime, but you may want children to get the proceeds when the house is eventually sold, rather than your spouse or your spouse’s children. This is easy to trust. If you brought more assets to the marriage, you may want more of the money to go to your children than your spouse’s children.
  • Be specific about who gets your stuff. You should also figure out in advance who will get important family items — even if their value is largely sentimental. You may not want your spouse’s children to inherit your mother’s china or silver collection. You can usually make those determinations in an attachment to your trust called a tangible personal property directive.
  • Choose the right trustee: The selection of the trustee is one of the most important aspects of properly planning an estate of a remarried spouse.
    • The surviving spouse of a second marriage should rarely be the sole trustee. Even if the spouse is well intended, he or she will invariably lack the necessary neutrality.
    • Your children should rarely be the sole trustees of the spousal trust. Again the possibility for partiality exists and suspicions will ride too high for effective trust administration.
    • A trusted family friend may be a good choice, but unfortunately, the trustee will be faced with difficult choices and extreme pressure by the beneficiaries, so even a good friend may refuse to continue to serve as trustee under such pressure.
    • Often the best bet, especially if the estate is sizeable, is a professional trust company.
    • The Farr Law Firm’s estate administration division also handles all aspects of estate administration, employing a team of professionals with wide-ranging expertise.

Hope this is helpful! Wishing you lots of luck and love in your upcoming marriage!

Hayek

 

 

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About Renee Eder

Renee Eder is the Director of Public Relations for the Farr Law Firm, and gives the voice to the Critters of Critter Corner. Renee’s poodle, Penny, is an official comfort dog who she and her children bring to visit with seniors who are in the early stages of dementia at a local senior home once a month.

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