Estate Planning for Second Marriages

Estate Planning For Second Marriages

Getting remarried is a cause for celebration, but it is also important to consider revising your estate plan during this time. Estate planning can be a complicated process, so couples should take the time to create a well-structured estate plan that addresses all of their needs and preferences. Estate planning for second marriages can also involve unique complications, especially if one or more of the new spouses has children from a prior relationship. If you are ready to revise your estate plan in Minnesota or Florida, consider contacting an experienced estate planning lawyer at the Roulet Law Firm, P.A., today by calling our Minnesota office at (763) 420-5087 or our Florida office at (941) 909-4644.

Consider a Prenuptial Agreement

Marriage is about love first and foremost, but it does have major financial implications. If the marriage does not work out and the spouses have no prenuptial agreement, the state will decide how the couple’s assets will be distributed. A prenuptial agreement allows the couple to set their own rules about what will happen to their assets in the event of a divorce.

Prenuptials can be especially useful in second marriages, as the spouses may have children from previous marriages, or one or both the spouses may bring significant assets into the marriage. A prenuptial agreement can help protect the inheritance of children from previous marriages by ensuring that they receive the assets their biological parent wants to leave to them, without unnecessary headaches in probate court.              

Changing Beneficiaries After a Second Marriage

Changing beneficiaries should be one of the first steps when estate planning for a second marriage. Skipping this step could mean that a former spouse remains the beneficiary for important financial accounts, meaning that the former spouse would receive those accounts after the death of the account holder. Most newlywed couples will want to change the beneficiaries on their accounts to their new spouse.

By making the new spouse the new beneficiary, the account owner ensures that the new spouse will be able to receive the money in the account without attaching it to the probate process. Children may also be added as secondary beneficiaries, which will allow them to receive the funds if both spouses pass away. Consider updating all accounts with beneficiary designations, including checking, savings, retirement, and life insurance accounts.

Updating a Will for a Second Marriage

After updating beneficiaries, newlyweds will need to determine how the rest of their assets will be distributed after the death of one spouse. Most people in this situation already have a Last Will and Testament (will) from their previous marriage, and this document will need to be updated to avoid allowing the former spouse to inherit important assets, such as the family home.

Unfortunately, there is no guarantee that the surviving spouse will abide by the terms of the will after his or her partner passes away. The surviving spouse could update the will again after the death and change the terms, including disinheriting the surviving children of the deceased spouse. For example, the surviving spouse could remove his or her stepchildren as heirs for jointly owned real estate properties. Fortunately, these risks can be mitigated by placing assets into a revocable trust. You may be able to learn more about protecting your assets and other issues related to estate planning for second marriages from an estate planning lawyer at the Roulet Law Firm, P.A.

Consider Creating a Revocable Trust

If the terms of a will state that all assets will be left to your surviving spouse, there is a risk that children from the first marriage will not receive the assets you brought into the new marriage. A revocable trust can be used to ensure that pre-marriage assets are distributed according to your wishes.

A revocable trust can include specific provisions for how assets should be distributed after the owner’s death. The trust can be funded with these assets, keeping them separate from the second spouse. The trust will become irrevocable after the owner passes away, meaning that the terms and conditions may not be altered. The assets can then be distributed according to the owner’s wishes without the risk of disputes in probate court.

Be Aware of State Spousal Elective Share Laws

In the United States, elective share laws dictate the percentage of an estate that a surviving spouse is entitled to after a partner passes away. These laws are designed to protect surviving spouses from disinheritance. Each state has its own elective share laws, so those who are about to get married for a second time should be aware of their state’s laws on this matter. The surviving spouse has the right to claim an elective share, regardless of the terms of the will.

Florida Elective Share Law

According to Section 732.201 of the Florida Statutes, surviving spouses are entitled to an elective share of 30 percent of the marital estate. The following types of property are included in the elective estate:

  • Any property that is subject to estate administration in any part of the United States
  • Pensions and retirement plants
  • Joint bank accounts
  • Payable-on-death accounts
  • Property held in joint tenancy and tenancy by entireties
  • Certain types of irrevocable transfers
  • Life insurance policies payable to a beneficiary other than the surviving spouse
  • Transfers made within one year of the spouse’s death
  • Irrevocable transfers to elective share trusts
  • Property that passes directly to the surviving spouse

Minnesota Elective Share Law

In Minnesota, the elective share varies based on how long the marriage lasted. The percentage is higher the longer the marriage, and the maximum percentage is set at 50 percent, which applies to marriages that lasted at least 15 years. Spouses from shorter marriages will be entitled to a lower percentage of the estate when invoking the elective share law.

According to 524.2-202 of the Minnesota Statutes, the elective share percentages are set as follows:

  • Less than one year — supplemental amount only
  • 1–2 years — 3 percent of the augmented estate
  • 2–3 years — 6 percent
  • 3–4 years — 9 percent
  • 4–5 years — 12 percent
  • 5–6 years — 15 percent
  • 6–7 years — 18 percent
  • 7–8 years — 21 percent
  • 8–9 years — 24 percent
  • 9–10 years — 27 percent
  • 10–11 years — 30 percent
  • 11–12 years — 34 percent
  • 12–13 years — 38 percent
  • 13–14 years — 42 percent
  • 14–15 years — 46 percent
  • More than 15 years — 50 percent

Learn More From an Estate Planning Lawyer Today

Estate planning can be a complex process for anyone. This is especially true for a person who is starting a new marriage with children or assets to consider. If you have questions about estate planning for second marriages in Florida or Minnesota, consider contacting an experienced estate planning lawyer at Roulet Law Firm, P.A., by calling our Minnesota office at (763) 420-5087 or our Florida office at (941) 909-4644 for more information or to schedule a consultation.

Chuck Roulet
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Nationally Recognized Estate Planning Attorney, Author, and Speaker
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