It’s always a good idea to review your estate plan, especially when a major life event, like a second marriage, is taking place. The use of pre-nuptial agreements gives prospective spouses the opportunity to discuss one another’s rights of inheritance and clarify a great many issues, says nwi.com in the article “Estate Planning: Planning for second marriages.”
There’s a second opportunity to sign an agreement detailing inheritance rights after the wedding takes place, called a “post-nuptial agreement.” The problem is that once the wedding has occurred and you are both legally married, you might get stuck with some surprises and, well, you’re married. For most people, it’s better to set things out before the wedding, rather than after.
Having the discussion prior to marriage can also help with financially planning your life together. There may have been dissolution decrees in one or both of the couple’s prior divorces that have requirements which must be satisfied, such as maintaining a life insurance policy with the ex-spouse as a beneficiary. This can have an impact on the couple’s estate plan. Because of arrangements like this, it is recommended that you have everything discussed upfront in the pre-nup.
There are also additional steps that should be followed for any estate review upon a marriage. First, make sure that the last will and testament reflects your new spouse. For second marriages in particular, you want to make sure any mention of the prior spouse lists them as just that, a prior spouse only.
Next, verify and confirm how all of the assets are owned. Will they continue to be owned by just one spouse, or converted to jointly owned? Does your estate plan have a trust, and if so, are assets owned by the trust? Does there need to be a change made to your trustees?
Many people don’t remember how their bank accounts are titled. Fewer still can tell you who their beneficiaries are on their retirement accounts, life insurance policies and bank accounts. Remember: the beneficiary designations are going to determine who receives these assets, regardless of any language in your last will and testament. Once you die, there is no way to contest that distribution. Review your accounts and make sure that the beneficiaries are up to date, especially if you want to remove your prior spouse from your designations.
Part of your pre-nup and estate plan review should include a discussion of inheritance rights for any children in the blended family. Do you want to leave assets only for your children, or do you want to leave assets for all the children? It’s not an easy conversation to have, especially at the start of the blending process.
Remember also that blended family dynamics can change over the years. When you review your estate plan next—in three to four years—you’ll have the opportunity to make changes that hopefully will reflect deepening bonds between all of the family members. Your estate planning attorney will help create and revise estate plans as your life circumstances evolve.
Reference: nwi.com (May 5, 2019) “Estate Planning: Planning for second marriages”