When you remarry after divorce, you should reevaluate your estate plan. Without a plan in place, your new spouse inherits a minimum of one-third of your assets if you have children from a previous marriage.
While your new spouse might intend to honor your wishes about distributing your assets after your death, he or she may not always follow through. To avoid this situation, you can use three planning options to ensure your assets go to your beneficiaries as you wish.
1. Set up trusts
You may want to provide for your children and spouse after death. One way to accomplish this is to set up a trust. The trust can provide financial support to your spouse while alive; then, the remaining funds go to your children.
2. Designate multiple beneficiaries
Accounts such as life insurance and annuities allow you to designate more than one beneficiary. If you want to ensure that your spouse does not cut your children out of their inheritance, establishing them as joint beneficiaries means a portion of the funds goes directly to them.
3. Create pre-nuptial agreements
Laying out expectations before marriage is another way to protect your children’s assets should you die before your new spouse. You can designate how much money your children receive from your estate to cover college and other life expenses, as well as disclose how much each beneficiary should receive from any life insurance policies.
Ensuring your estate plan includes at least one of these tools makes it easier for your beneficiaries to receive the assets you intended.
