If you are getting remarried as a parent, you have a lot of things on your plate on more levels than one. Inheritance planning may not be on the top of the list at first, but when the date gets closer, you should certainly make some decisions.
In this post, we will provide four tips that can help you see the picture more clearly if you are in this position.
A simple will is a risky choice.
You may be tempted to let your fiancé know that you are changing your will to make them the sole inheritor of your property. Obviously, this is a personal decision, and the way that you proceed is entirely up to you.
However, from a pragmatic perspective, you may want to think twice before you make the romantic choice. If you predecease your spouse, you really have no way of knowing if they would provide for your children in the manner that you would deem to be appropriate.
It is important to recognize the fact that the dynamic that exists on the day that you are getting married will not be permanent. Your bond may become stronger, and your blended family may become seamless, but there are other possibilities that are less than ideal.
To make sure that you are covering all your bases, you could forgo a will in favor of a qualified terminable interest property (QTIP) trust. The way that it works is you fund the trust and you make your spouse the first beneficiary, and your children would be the successor beneficiaries.
Assuming you predecease your spouse, the trustee would distribute the earnings that are generated by the assets in the trust to your spouse for the rest of their life. You could give the trustee the discretion to distribute portions of the principal if this is your choice.
Your surviving spouse could also live in a home that is technically owned by the trust or use other types of property without actually owning it. They would be in a comfortable position, but they would not have the ability to change the terms of the trust.
After your passing, your children would become the sole beneficiaries of the QTIP trust and they would receive distributions in accordance with your stated wishes.
Choose the trustee carefully.
The dynamic that will exist if you use a trust to protect your spouse and your children can be a bit sensitive, and you should keep this in mind when you are choosing a trustee. If you use someone that you know that has a personal stake in the family, there can be real or perceived conflicts.
Plus, there is also the matter of effectively handing the investments. With all of this in mind, you can engage a professional fiduciary like the trust company or the trust department of a bank. These entities provide trustee services, and this can be the right choice in many instances.
Acknowledge the fact that your spouse may remarry.
When you are envisioning the scenarios that could exist after you are gone, you should take a realistic approach. Your spouse could potentially remarry, and you have to ask yourself how that would impact the inheritance planning dynamic as it applies to your children.
State your preferences for health care decision-making.
Many people become incapacitated and unable to communicate health care decisions toward the end of their lives. Family members are not always on the same page, and this can definitely enter the picture when you have biological children and a spouse that is not their parent.
Even if this situation does not exist, you should have documents called advanced directives for health care.
Medical scenarios can arise and have nothing to do with the use of life-support. To account for this, you should name a representative to act on your behalf in a durable power of attorney for health care. A HIPAA release should be added to give doctors the ability to discuss your condition with your representative.
Schedule a Consultation Today!
As you can see, there are many things to think about, whether you are getting remarried or not. The right way to proceed will depend on the circumstances, but there is an ideal approach to address any situation.
You can schedule a consultation if you call us at 802-879-7133, and you can fill out our contact form if you would prefer to send us a message.
- 10 Estate Planning Tips to Help Your Plan Succeed - September 7, 2023
- What Bruce Willis Can Teach Us About Incapacity Planning - August 29, 2023
- What You Need to Know about an Inherited IRA or 401(k) - August 17, 2023