As we head into wedding season, we’ll be taking a look at the impact of marriage, divorce and re-marriage on estate plans. As many of you may know, any change in your marital status impacts your estate plan.
If you’re marrying for the first time, you’ll need to ensure your estate plan will take care of a surviving spouse and makes the most efficient use of the tax planning benefits of a marriage. If you’ve recently divorced, you’ll want to ensure your estate planning—and especially asset ownership—are in line with not just your divorce decree, but also an updated estate plan. And for those re-marrying, you may have children from a previous marriage to care for and there can be many ways to handle that in an estate plan.
Newlyweds may or may not yet have children to incorporate into their estate planning, but that doesn’t mean you won’t need to think about it. At the moment, you might want to include nieces or nephews in the plan or plan on giving your assets to a charity or cause that’s important to you. Down the road, if you do have children, that will necessitate other alterations to your estate plan. Even now, there’s often tax planning techniques you might incorporate to minimize the impact on any heirs or a surviving spouse.
For those in the throes of divorce, you’ll need to not only update your estate plan to be consistent with your new marital status, but you’ll need to ensure it aligns with your divorce decree. Your court-approved property settlement agreement outlines who gets what and how to divide assets. However, you’ll have to work with financial institutions to ensure alignment with the court order.
If possession is nine-tenths of the law, financial institutions truly are the ones who own your assets. If you don’t communicate with your financial institutions and change any ownership of assets or fail to update beneficiary designations, you could end up violating your divorce decree. It’s crucial to work with financial institutions to ensure proper alignment not only with your updated estate plan, but with your divorce decree, as well. An experienced estate planning attorney will be able to help you create a plan that takes care of your family while still keeping to the property settlement agreement.
A re-marriage is a beautiful—and now far more common—event. However, blending families can create new and unexpected estate planning needs. Not only will you need to ensure compliance with any divorce decrees, but you may need to be clear in your estate plan about your children. In some cases, unless you specify that you mean both children of your previous marriage and children of your current marriage, you might unintentionally disinherit a child. By working with an experienced estate planning attorney, you should be able to address some of the more common pitfalls.
In today’s society—and with the high rate of divorce—it’s important to understand how a change in marital status can impact your estate plan. It’s even more important to ensure your assets align with your estate plan! At Family Estate Planning Law Group, we work with married, divorced and re-married clients to ensure that their estate plans will work. That means not only working with any divorce decrees, but also with financial institutions to ensure all assets are correctly titled (i.e. have the correct name on the account) or have the correct beneficiary designation, getting verification of the correct alignment, then tracking changes in the assets over time. This is usually what determines if an estate plan will work!
For more information on the importance of marriage, divorce and re-marriage on your estate plan, keep up-to-date with our blog posts. For more on why we at Family Estate Planning Law Group focus on asset alignment, verification and tracking, explore our website and contact us to schedule your consultation today!