According to the CDC, in 2021 a total of 689,308 divorces occurred across the 45 reporting U.S. states. During that same year, 1,985,072 marriages occurred, making the U.S. marriage rate 6 per every 1,000 people. As you can imagine, many of those individuals go on to remarry, at which time families blend, finances and assets may blend and it’s important to consider (or reconsider) one’s estate plan.
When entering into a second (or third) marriage, often one is further along in their life and career and may have amassed significantly more wealth. Alternatively, a divorce and/or other life occurrences may have depleted an individual of a certain amount of their wealth. Additionally, children are traditionally older and may no longer be minors and long-term life goals change for remarrying individuals.
With these things in mind, here are some tips to consider when considering or entering into remarriage:
- Use a trust as a beneficiary. If you have life insurance, you may want to create a trust and name that trust as the beneficiary of your life insurance proceeds. The trust will dictate how monies are distributed after your death, which allows you to maintain control over funds while also offering protection from beneficiaries’ irresponsible spending, creditors and sometimes even estate taxes.
- Plan separately from your new spouse. Whether you and your new spouse are both bringing considerable wealth into the new marriage or if you and your new spouse are bringing a disproportionate amount of wealth into the new marriage, it’s wise to create separate estate plans. While planning jointly may not be problematic, it’s best to have an honest conversation with your new spouse, and ideally an estate planning attorney, to determine which route to take and why.
- Consider a QTIP trust. In the scenario where one spouse has significantly more wealth than the other, a QTIP (qualified terminable interest property) trust may be an especially helpful estate planning mechanism. These enable the grantor (the person creating the trust) to provide for a surviving spouse while maintaining control over how the trust’s assets are distributed AFTER the death of the surviving spouse.
For more information on estate planning in general or estate planning through remarriage, call our office and schedule your consultation today! (251) 621-1555