According to a Pew Research survey, 40% of new marriages in the United States are second (or subsequent) marriages for at least one of the spouses. Currently, more than 42 million people in the United States are remarried. This dynamic has placed more adults in need of solid techniques for estate planning for second marriages and their unique situations. The experienced estate planning lawyers at Harrison Law, PLLC can create an estate plan that addresses your specific needs and concerns. Consider contacting one of our experienced lawyers by calling (480) 320-2310.
Special Considerations for Estate Planning for Second Marriages
In nuclear families, estate planning tends to be more straightforward than estate planning for second marriages. A typical arrangement is for each spouse to name the other as the sole beneficiary of their estate. The surviving spouse would then leave property to the couple’s children after their own passing.
However, second marriage estate planning may be more complex. Some unique considerations for these plans include:
- How to ensure that children from a previous marriage are accounted for
- How to provide for future children who may be born during the new marriage
- How to provide for a new spouse
- How to factor in any previous obligations to a former spouse, such as ensuring alimony payments or maintaining life insurance according to a court order
- Whether to name more than one person as a beneficiary or owner of real property
- Protecting a retirement account that has already been divided in a previous divorce
- Protecting more assets now that the spouses are older than they were in their previous marriage and may have accumulated more property or wealth
- Financial liability for nursing home and long-term care costs
What Happens If You Die Without a Will in Arizona?
If you fail to create an estate plan, your estate will be subject to Arizona’s law of intestacy. According to this law, your surviving spouse inherits your half of the community property and all of your separate estate if you do not have any children, or you only have children with your surviving spouse. If you do have children, your children will inherit your portion of the community property unless you owned the property as “community property with the right of survivorship.” Additionally, your children and your spouse will split your separate property.
Once your spouse inherits property from you through your Will, your spouse has no obligation to share the property with your children or grandchildren. If your spouse does share property with your children, he or she may be subject to a gift tax payable to the Internal Revenue Service (IRS).
Estate Planning Techniques for Second Marriages
There are several effective techniques that spouses can use when creating an estate plan after a second marriage, including:
Prenuptial and Postnuptial Agreements
A prenuptial or postnuptial agreement can avoid Arizona’s default community property rules. Generally, in the state of Arizona, any property you or your spouse obtain during your marriage is equally owned by you and your spouse. With a pre- or post-nuptial agreement, you can identify separate property, distinguish assets you obtain in the future as separate property, and state the rights and responsibilities of each spouse regarding those assets.
Pre- and postnuptial agreements can be effective estate planning tools because they clearly classify property. We often encourage our clients to address these property issues with their family law attorney before creating an estate plan. In fact, these agreements can often address certain property and asset issues where traditional estate planning cannot. Each spouse can feel comfortable knowing that their separate property will remain separate after marriage. Additionally, they have a plan regarding finances and division of assets in case of death or divorce.
Beneficiary Designations
An effective and affordable estate planning technique for second marriages is to provide certain assets or accounts to beneficiaries. For example, if you are concerned about providing for both your spouse and children, you may name one or the other as the beneficiary of your IRA, savings account, or other asset. Assets that pass through a beneficiary designation are not part of the estate that is divided at the time of your passing.
Trusts
A carefully crafted trust can also provide for multiple beneficiaries, such as your spouse and children from a previous relationship. You can structure trusts any way you see fit. For example, you could have a neutral trustee make distributions at their discretion, such as to pay for your beneficiaries’ health or education needs. Alternatively, you could provide lump-sum payments as beneficiaries reach certain ages or milestones. In certain trusts involving high-valued estates, you could also provide one beneficiary or group of beneficiaries with the income from the trust during their lifetime and the remainder to the other set of beneficiaries upon their passing.
Practical Tips for Estate Planning for Second Marriages
Understanding that your estate plan may be more complex when you have been married previously is the first step toward creating a plan that works for you. Here are some additional tips to make your estate planning smoother:
Legally Revoke Previous Estate Planning Documents
While Arizona law automatically revokes any gifts or powers provided to your ex-spouse, you should not rely on this law. You will likely need to update your estate planning documents to account for your new spouse. Therefore, it makes sense to revoke your previous estate planning documents in favor of your ex and to create new ones. You can include a provision that states your intent to fully disinherit your ex-spouse for clarity and legal consistency.
Plan for Children and Stepchildren
One of the most emotionally complex issues you may contend with is how to treat your children and stepchildren. The law does not provide for stepchildren to inherit from you unless you have legally adopted them. Therefore, if you want them to benefit from your estate plan, you will need to specifically name them.
You may also wonder whether you should treat your children from a previous marriage the same as any children you have with your new spouse. Some people prefer to treat all of the children equally. Others are more concerned about what seems fair, which may not always be what is equal.
Harrison Law Can Help Ensure Your Legal and Financial Rights Remain Protected
An experienced estate planning lawyer from Harrison Law can discuss your goals and help create a plan that accounts for your unique situation. If you would like legal advice or guidance with estate planning for second marriages, consider contacting a dedicated and compassionate estate planning lawyer from Harrison Law by calling (480) 320-2310.
© 2022 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
