Finances and Your Second Marriage
Marriage looks a bit different when you’re saying “I do” for the second or third time. You’re a bit older, probably have accumulated some assets, and might have children from a prior relationship.
When people enter a first marriage, they often do so as financial equals, but this isn’t necessarily the case with a subsequent union. If you are approaching remarriage, the best strategy is to give yourself time to work out the financial and legal details of your estate before you head to the altar.
Check Your Beneficiaries
Depending on how long you’ve been divorced, it’s a good idea to check all of the beneficiaries on financial accounts and update them. You might find that a prior spouse is listed as a beneficiary on your life insurance, 401(k), or bank account, and this no longer meets your needs or wishes.
Consider a Prenuptial Agreement
Once considered something only done by the incredibly wealthy, prenuptial agreements have become more common these days. One reason for this is that younger generations are marrying later and bringing more assets (and debt) into the union.
If you are remarrying, a prenup should be on the table. It is a legally binding agreement that details how assets and liabilities will be divided in the event of divorce. A qualified family law attorney can facilitate this agreement.
Keep Some Accounts Separate
In a second marriage, you might want to pause before agreeing to co-mingle all of your financial accounts. This is particularly the case if you have children from a prior marriage, alimony or child support payments or other debts.
Most financial advisors recommend keeping separate investment, checking, and savings accounts and then creating a joint account that handles shared expenses. It’s also a good idea to come to an agreement about who will cover which common living and household expenses to avoid any potential conflicts.
Take a Close Look at Your Estate Plan
While you don’t have to have your estate plan finalized before walking down the aisle, this is something that should be a priority. A solid estate plan will protect your assets from a prior marriage, ensure that children and grandchildren are provided for according to your wishes, and give you some excellent tax benefits.
Without an estate plan in place, most of your assets will go to probate and could pass directly to your new spouse and then your spouse’s children. This would mean that your children from a prior marriage might not receive anything, and this is an issue that often leads to unnecessary court battles.
If you’re getting ready to tie the knot for the second time or have just done so, some of the estate planning documents we recommend include:
Without a will, the state is going to decide who gets your assets upon death. Not only does a will give you the opportunity to direct how certain assets will be distributed, it also allows you to state your wishes regarding final arrangements.
In some cases, a dispute might arise between new spouses and children from a first marriage about the location of your burial or funeral arrangements. You can spell out theses wishes in as much detail as you desire in a will to avoid these types of conflicts.
Financial Power of Attorney
If you are no longer able to make decisions for yourself because of a medical issue or an accident, who is going to make your financial decisions? Should it be your new spouse, an adult child, or a combination of people working as co-agents. When you re-marry, you can and should make this decision and spell it out in a Financial Power of Attorney document.
Living Will and Medical Power of Attorney
Likewise, if you’re not able to make medical decisions for yourself, who will decide about your continuing care or when it’s time to withdraw life-sustaining measures? Your Living Will and Medical Power of Attorney dictate these choices.
When you are married, there are many benefits to having a revocable trust. In a second marriage, this is particularly useful because it allows you to keep assets separate from your spouse and give your child(ren) the right to administer the trust. You can also name who gets what assets upon your death and stipulate how those assets are distributed. A revocable trust means that you can make updates to the document as your needs and wishes change.
We Make Virginia Estate Planning and Family Law Matters Easier
If you have questions about estate planning for a second marriage or any family law matter, the experienced attorneys at Buck, Toscano & Tereskerz can help. Our office has over 100 years of combined legal experience helping people throughout the Charlottesville area with all manner of estate planning arrangements.
Our goal is to make it simple for you to understand trusts, estate planning, and your legal rights so that you can make the best decisions for yourself and your loved ones. Contact our office today at 434-977-7977 or reach out to us online to schedule an initial consultation.