Remarriage among individuals who are 55 and older increased approximately 15 percent between 1960 to 2013.
No matter the reason for remarriage, estate planning often becomes much more complex when a new partner is involved. These issues can be made even more complex if a couple makes the decision to remarry later in life.
# 1 – Determine what Each Person Brought into the Marriage
It is important to consider several factors when deciding whether to combine assets that both spouses bring into a marriage.
It is often true that when one spouse brings many more assets into a marriage than the other spouse, the couple decides to keep the assets separate.
In many cases, children also influence whether a couple decides to combine assets. This is because people who already have children often want to make sure that certain assets are left for them.
Younger couples also tend to combine assets more than older individuals.
# 2 – Consider Tax Consequences
For couples who are getting married for a second time, it is important to consider tax consequences.
Some couples decide to make the most of estate tax and gift exclusions, which allow a certain amount of gifts during their lives without paying taxes on the amount.
It is also important to review any unique state estate tax issues that might end up applying to the administration of assets.
# 3 – Consider the Role of Wills and Trusts
Couples who get married later in life often discover that wills are a powerful way to divide personal property. Trusts can also play a powerful role in estate plans. This is because trusts hold assets on behalf of a beneficiary and allow individuals to specify how and when assets pass to any designated beneficiaries.
Because properly written trusts also allow assets to avoid probate, trusts are also advantageous because beneficiaries receive assets more quickly than assets that are transferred through a will.
Additionally, credit shelter trusts (CSTs) or bypass trusts are capable of providing income to surviving spouses while preserving the deceased spouse’s control over any beneficiaries.
Other couples discover that qualified terminable interest property trusts are helpful because these trusts can provide income and principal to a surviving spouse while preserving any underlying assets.
# 4 – Review Beneficiary Designations
It is important to review and if necessary update any beneficiary designations which might be found on life insurance policies or retirement accounts. Failure to make these changes means that your assets could end up going to a former spouse or someone you do not want to receive these benefits.
When selecting which beneficiary to appoint, it is important to be cautious. While you might feel the temptation to pass all of your assets on to your new spouse, it might be a better idea to pass on assets to your heirs.
Speak with an Experienced Estate Planning Lawyer
Estate planning is complex. Fortunately, an experienced estate planning lawyer can help. Contact Ettinger Estate Planning today to schedule a free initial consultation.