• 16
  • August
    2010

As people are living longer and the divorce rate is around fifty percent, remarriage has become quite common. Many choose to find love again after divorce or the death of their spouse. However, the creation of these blended families can lead to many issues in estate planning. What once was a big, happy blended family might turn into discord upon the death of one of the remarried spouses.

 For example, let's say John and Jane are married. Both have been married before and have adult children from their previous marriages. If Jane dies first, there is a possibility that conflict could arise between Jane's children and John. Emotions can run high in situations like this, and anything you can do to avoid this scenario would be beneficial.

So, what should remarried couples do to avoid any family arguments after one spouse is gone?

Jane could obtain a life insurance policy that pays her children upon her death. Likewise, she could make an outright bequest to her children payable upon her death. This way the children will not have to wait until John dies before they can receive their inheritance.

Also, if John will need his and Jane's combined assets upon her death, Jane can create a living trust so that John can use the assets until his death, at which time her children will receive the remaining assets. Jane could create a professional co-trustee with John to ensure that John does not deplete all of the assets before her children receive the remainder.

One important thing to remember is that prenuptial agreements can become outdated and need to be revised over time to ensure the document still meets your needs. For example, a prenuptial agreement that arranges for all of the spouses' assets to be separate will not be binding if Medicaid is needed to pay for the cost of a nursing home or hospital costs. A Medicaid Asset Protection Trust or long-term care insurance are both options to protect assets in this situation.

The best thing you can do if you have a blended family through marriage is to plan for the unexpected and make sure you have all of your bases covered in order to ensure that the children and your spouse will be taken care of should you die first.

Source: Times Herald-Record "Boomers: Remarriage complicates planning" 8/15/10