It is common for married couples to prepare wills where everything is left to the surviving spouse and then to the kids. But what happens when one or both new spouses already have children? Without careful planning, parents may end up unintentionally leaving their children with no inheritance and their new spouse’s children with everything.
In a family where both spouses are the children’s biological parents, both spouses usually want the surviving spouse to inherit everything at the first spouse’s death, so that the surviving spouse and children will be taken care of, and then the children inherit what remains when the surviving parent dies. However, if you re-marry and your property is left to your new spouse at your death, anything you have left to your new spouse will be inherited by his or her heirs rather than yours. Unless they are named specifically in your new spouse’s will, your adult children will not inherit from your new spouse and may be left with nothing at your new spouse’s death.
With some advance planning, there are ways to ensure that your children inherit your property while still providing for your new spouse. A simple will is usually not enough to accomplish this, especially if your children are minors, but a trust is able to provide for all parties. A trust can be flexible in meeting the needs of your surviving spouse during his or her life while still allowing your children to inherit what is left. A trust can also include safeguards for your spouse and children, including those with special needs, and accomplish tax planning.
In addition, you may need to revisit your beneficiary designations for accounts paying out directly, like your IRA or 401K, or life insurance policies. If you are getting divorced (or already are), don’t forget to remove your former spouse as the primary beneficiary on these accounts, even if you’ve dealt with them in a separation or divorce agreement.
Though one plan will not fit all families, it is important to discuss these issues with your spouse if children are involved. Planning with the assistance of a knowledgeable attorney can prevent surprises and help avoid hurt feelings down the road, as well as giving you peace of mind that you are taking care of your entire family after your death.
Susan K. Hill is an attorney at Block, Crouch, Keeter, Behm & Sayed, LLP and practices in the areas of estate planning, business and tax law, and real estate transactions. This article is intended to offer general information and not specific legal advice. If you would like a consultation regarding your estate planning issues, please call (910) 763-2727 to make an appointment.