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Remarriage and common estate planning errors

Remarriage and common estate planning errors

| Oct 23, 2020 | Uncategorized

It can be important for people in North Carolina to update their estate plan when they get remarried. Otherwise, the person’s wishes might not be carried out, and loved ones could suffer as a result.

Second marriages and children

For example, if an estate plan only names children and not the new spouse, the new spouse might not inherit as intended. Even if there is a good relationship between children from a former marriage and a new spouse, relationships can sour following a person’s death. This can work both ways. A person should also not assume that a spouse will share assets with children from a previous marriage. One way to protect the spouse might be to have the estate plan include a provision that allows the spouse to stay in the home for the rest of their life. A trust could be the solution to keeping both the spouse and children protected. There are several options for a suitable trust, but one might contain assets for the spouse that then pass to the children on the spouse’s death.

Life insurance

There is a potential drawback to using a trust. If the spouse falls ill, all assets could be depleted in their care, and there might be nothing left for the children from the earlier marriage. People may want to consider using life insurance to protect the spouse while leaving the other assets to the children.

Beneficiary designations

A common estate planning error is failing to update beneficiary designations. This could mean that an ex-spouse gets the money from retirement accounts or a life insurance policy. Estate plans, including beneficiary designations, should be reviewed and updated if necessary after divorce and any other major life changes.

If you do not have an estate plan or you have an estate plan but haven’t updated it for some time, an attorney may help. One possible advantage of working with an attorney is that they might suggest solutions to complex issues that you are unaware of, such as creating a trust for loved ones with special needs.