There are different estate planning approaches that can be taken depending on the circumstances. If you make assumptions without seeking legal counsel, you could make mistakes that yield negative consequences.
With this in mind, we will provide some tips about estate planning for parents that are getting remarried in this post.
Don’t assume that leaving everything to your spouse in a simple will is the right choice.
On the day that you are getting married, there will be a great deal of optimism about a beautiful life together. In many cases, the storybook plot plays itself out, but this is not an absolute certainty.
If you leave everything to your spouse in a will, you are taking a leap of faith. Even if you and your spouse remained married throughout your life, there are no guarantees with regard to the actions that your spouse will take after your passing.
How can you be sure that they will provide for your children appropriately? The answer is that you really cannot know, but you can take the matter into your own hands in advance.
A qualified terminable interest property (QTIP) trust can provide the best of both worlds. If you execute this strategy, you name your spouse as the initial beneficiary of the trust, and your children would be the successor beneficiaries.
If you predecease your spouse, the trustee would distribute the trust’s earnings to your spouse for the rest of their life. You could instruct the trustee to distribute portions of the principal on a discretionary basis, but the choice is up to you.
Your spouse could also utilize property that is held by the trust. For example, they could live in a home that is owned by the trust. The surviving spouse would not have the ability to change the terms of the trust in any way, so your children would be protected.
After the passing of your spouse, the trustee would follow your recorded instructions and distribute assets to the children in accordance with your wishes.
Choose a qualified trustee with no personal interests.
Any competent adult that is willing to take on the role can legally serve as a trustee, so you can name someone that you know to assume the role. However, if you choose someone that has a relationship with your family, there can be real or perceived conflicts of interest.
There is also the matter of investment management since this type of trust will typically be funded with appreciable assets. Trust companies and the trust departments of banks provide trustee services, and a professional fiduciary can be the right choice in many instances.
Digest the fact that your spouse may remarry.
When you envision inheritance planning scenarios between your spouse and your children, you may not want to think about a very real possibility. Your spouse may remarry after you are gone, and that can change everything. It is wise to pragmatically accept this potential outcome and act accordingly.
Consider direct bequests to your children.
If you use a trust to cover both of your bases without arranging for your children to receive inheritances immediately after your passing, there is another facet to take into consideration.
The children would be placed in the awkward position of knowing that they will receive their bequests whenever your spouse is gone. This is a touchy situation, and it can be avoided if you make sure that your children receive some of their inheritances while your spouse is still living.
State your wishes with regard to health care decisions.
Many people become unable to communicate when they are experiencing health problems late in their lives. Under the circumstances, your spouse and your children may have different ideas about the way to proceed.
You can nip potential acrimony in the bud and assert your own wishes if you execute advance directives for health care. These directives can be used to state your life-support preferences, and you can also include organ and tissue donation and comfort care medication choices. You can also name a health care designee to help make these decisions if you are unable to do so yourself.
We are here to help!
Today is the day for action if you are going through life without an estate plan, and we can help you update your existing plan if revisions are necessary. You can schedule a consultation at our Schererville location if you call us at 219-865-2285. The number for our Lafayette office is 765-767-5225, and you can use our contact form if you would like to send us a message.
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