You did all the planning the right way. Met with the estate planner early on, changed beneficiary designations, set up a testamentary trust - the whole works. But then, the marriage didn't work out. You got divorced, remarried and now it's time to set up a new plan. Much of the information you need will be the same, but this time there are a few additional challenges to be aware of:
• Multiple Sets of Children. It is normal to have a strong desire to provide for your biological children from your prior marriage. However, sometimes a new spouse will see this as an emotional attachment to your ex or may resent the possibility that providing for them might take away from children of the current relationship. One solution would be to use separate assets to fund the inheritance for your kids from the prior marriage.
• Unresolved Emotional Issues. If you've been through a recent divorce, your last meeting with an attorney may have been in the context of a difficult divorce. It's important to try and make decisions for your current estate plan based on the here and now. A good estate planner can help you keep your focus.
• Support Obligations to Prior Spouse or Children. Even if the discussion is difficult, it is important to share with your estate planner all of the details of support obligations and share the relevant documents. Your estate planner will confirm that the agreements are being met, such as by appropriately designating beneficiaries and purchasing insurance.
• The May/December Romance. Often second marriages involve spouses with substantial age differences. The younger spouse may be about the same age as the children from the prior marriage. One common estate planning technique - the QTIP - involves an interest for life of the spouse. This might require the children to wait for the death of the younger spouse before getting their inheritance, possibly creating animosity between the children and second spouse. Your estate planner might suggest capping the QTIP at a fraction of the estate to resolve this issue.
Despite the challenges, it is worth sitting down and redrafting your plan to make sure your wishes are carried out. An attentive and creative estate planner can help you work through the challenges to come up with an appropriate plan.
Source for Post: Probate & Property Magazine, March/April 2007
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