How is Estate Planning different in a second marriage?

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A second marriage can add an additional layer of complexity to estate planning.

There may be children from previous marriages and also the second marriage. In a blended family situation each spouse may want the assets brought into the marriage to go to the children from the previous marriage(s). Ensuring the surviving spouse has enough to live on at the first spouse’ death is also a concern.

It is important to discuss your goals and possible scenarios with your spouse when developing a new estate plan. What seems fair to you may not seem fair to your new spouse. A major concern is the spousal home. How will it be owned during both your lives? If you own it together/Tenants by the Entirety (TE), at the first spouse’ death the surviving spouse owns 100% of the home by right of survivorship and can dispose of it any way she/he wants. Owning the home as Tenants in Common (TIC) means each spouse has an undivided one-half interest in the home. This means each spouse has control over half the home but can also create tension between the surviving spouse who needs to continue living in the home and the children of the deceased spouse who want their share. A similar concern arises with beneficiary designated assets. If you name your new spouse as beneficiary on retirement accounts, annuities, and/or life insurance policies the asset will pass to your surviving spouse at your death. The surviving spouse can then name his/her beneficiaries on the inherited retirement accounts, which might not be your intended outcome.

A revocable living trust and prenuptial agreement may be useful tools in providing for the surviving spouse, children from a previous marriage, and children of the new marriage in a fair manner. The trust can provide for how assets are managed during your joint lifetimes, during the lifetime of the surviving spouse, and at the surviving spouse’ death.

An experience estate planning attorney can discuss your situation and goals and explain your options for ensuring your wishes are carried out. Contact the Estate Planning attorneys with the Law Offices of Nay & Friedenberg in Portland, Oregon at (503) 245-0894 to set an appointment.

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