Estate Planning For Second Marriages

I have had several clients in my office recently with a common issue — problems stemming from estate planning (or lack of proper estate planning) in a second marriage.  I have met with surviving spouses, and I have met with children and step-children.  All of them tell me the same thing: “My (spouse) (father) (mother) wouldn’t have wanted it this way”.  Failure to properly plan in these cases can leave your surviving spouse “on the street”, or mistakenly disinherit your children. 

Estate planning for second marriages is a difficult challenge.  You want to provide for your spouse (and certainly want your spouse to provide for you), but you also want to protect an inheritance for your children from a previous marriage.  How your assets (especially your home) are held and distributed requires special consideration. The extent to which this balancing creates issues depends on each spouse’s net worth and each spouse’s desires relating to other beneficiaries.  You need to ask the tough questions: “What happens if I die first?” and “What happens if my spouse dies first?”  Once you have fully analyzed the consequences, you can set your goals and a plan can be implemented to meet those goals (along with other desired goals such as probate avoidance and tax reduction).  Too many people “leave it to chance”, which results in leaving your family in conflict. I recently saw a simple definition of “legacy” as “something handed down”.  You have the ability to “hand down” good, or to “hand down” bad.  If you don’t properly plan for a second marriage, you are likely to “hand down” bad.  Don’t let that happen, especially when it can be easily avoided with proper planning.

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