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Are you considering remarrying? Are you thinking that February is the perfect month to plan a wedding, including the venue, the menu and all the combined family, yours and your future spouse’s? As you and your future spouse think about what needs to be done, what about your Alabama estate plan? Whether you currently have one or not, you should have one before you remarry. Here is why.
In a first marriage the goals of most spouses match and estate planning is not a problem. Each spouse wants to take care of the surviving spouse for as long as he or she lives, and then divide what is left equally among their children. Or, if your children are still minors, you set up a trust for the children until they are adults. And, in fact, most couples jointly own their assets. However, and this is important, it is not usually the case when dealing with remarriage and estate planning.
When you remarry or marry later in life or marry after amassing significant wealth, your goals and the goals of your future spouse may not be so perfectly aligned, and the traditional methods for Alabama estate planning may not work as well. For example: You decide to put your new spouse on the title of the home you own, it is now considered jointly owned with the right of survivorship. In other words, when you pass away, the home becomes the property of your spouse, without restriction. In addition, there may be no guarantee that he or she will pass it along to your children from your prior marriage. So let us share three key tips with you to think about.
1: Separate estate planning. Consider doing your estate planning separately, especially if you or your future spouse have significant assets. Have an honest conversation about your individual estate planning goals and make the decision together. If your goals are sufficiently similar, then you may be able to plan jointly. If they are significantly different, consider having separate attorneys.
2: QTIP trust. You could use a QTIP trust in estate planning if you have significantly more assets than your future spouse. To explain, by using a QTIP Trust your spouse could continue to live in your home, but upon his or her death, your children, not the children of your spouse, would inherit the property.
3: A trust as a beneficiary. Finally, consider naming a trust as the beneficiary of your life insurance. The trust can allow you to control when and to whom monies are distributed, so that you can provide for your spouse during his or her lifetime, and yet keep control over the proceeds. The trust can also protect your spouse from irresponsible spending, creditors, predators, and even estate taxes.
We know this article may raise more questions than it answers. At the end of the day, estate planning and elder law planning are not just for you. Instead, it is for the ones you love most. If we can answer any questions for you on putting this estate planning in place, please do not hesitate to let us know. For more information, please reach out to our office and schedule a time to meet.