Did you know creating a different estate plan than the other spouse’s estate plan is not unusual in second marriages?
This often holds true especially where each spouse has children that are not the children of the other spouse. This may be due to the fact that the spouses have each received assets from an initial marriage that were inherited from the first spouse. The surviving spouse may want to be sure that the assets of his or her deceased spouse are ultimately received by the children of the first marriage when he or she dies.
In order to achieve this goal, the surviving spouse may want to transfer the ownership of the assets he or she inherited from the first spouse into a trust that names the children of the deceased spouse as the surviving beneficiaries of the trust instead of his or her second spouse. The surviving spouse, however, may continue to have the use and benefit of the trust assets until he or she dies.
The surviving spouse will need to name the successor trustee of his or her trust to be someone other than the second spouse or a relative of the second spouse.
In these scenarios, it is important to discuss options with your estate planning attorney.
He or she may recommend a bank trust company be named as the successor trustee if the assets of the surviving spouse’s trust are of sufficient size to warrant the cost of the annual trustee fees. Otherwise, a relative of the first deceased spouse’s children could be appointed as the successor trustee.
It is also important to consider in this instance that the surviving spouse and his or her new spouse sign an enforceable pre-nuptial or post-nuptial agreement. This can allow them to waive any claim to any of the assets inherited by the new spouse from the surviving spouse. Without such an agreement, the new spouse could be entitled to receive a pretermitted share of the deceased surviving spouse’s assets, which could be all of the surviving spouse’s assets. In the alternative, the new spouse may be entitled to an elective share of the surviving spouse’s assets. This is regardless of the surviving spouse having children by the first spouse.
The key to any good estate plan is to work with your attorney to memorialize your wishes and ensure that the legacy you want can be reached.
We encourage you to ask us your questions on this or any issue as you plan forward for the right plan for you.