It is critical to update your estate plan every time you experience a significant life event, such as getting married. Individuals getting remarried face unique estate planning challenges. If you do not plan carefully, you could neglect certain family members or cause family discord. An experienced Phoenix estate planning attorney can ensure that you have a comprehensive estate plan that fits your new family’s needs.
Below are five unique estate planning concerns for individuals entering their second marriage in Phoenix, Arizona.
- Balance the Interests of Blended Families Members
Often individuals enter second marriages with children from outside the marriage. This situation can cause estate planning complications. In a traditional nuclear family, it is common to leave everything to your spouse because you know the inheritance will flow down to the children they share. However, with a blended family, you must take proactive steps to ensure that both the interests of your children and new spouse are protected.
In Arizona, if an individual with a surviving spouse and children from a prior relationship dies without an estate plan, half of the estate goes to the surviving spouse, and half is split between the children from the previous relationship. For many individuals, this is not what they want to occur. Their children may receive less than they would have liked, and their spouses could be left in a vulnerable position.
An experienced Phoenix estate planning attorney can work with you to create solutions that fit your family. For example, if you are concerned about your surviving spouse staying in your family home, you could create a life estate in the home for your surviving spouse. A life estate gives your surviving spouse the right to live in the residence for their life. You could then leave your children from outside the marriage full ownership of the house once the surviving spouse no longer lives there. This strategy ensures that your surviving spouse will have somewhere to live but also that your inheritance flows to your children at your spouse’s death.
- Update Beneficiary Designations
It is critical for individuals getting remarried to update their beneficiary designations. In most cases, your original beneficiary is your ex-spouse—who you presumably would not want to inherit the account at your death. Under Arizona law, an ex-spouse is automatically revoked as the beneficiary of wills, life insurance policies, or annuities. The benefits are paid out as if your ex-spouse died before you and distributed per Arizona’s intestacy laws. However, most employee benefit and retirement plans are governed by federal law, and your ex-spouse will remain your beneficiary even after your divorce is finalized. The best course of action is to go through your beneficiary accounts and ensure that the beneficiary designations are up to date with your current wishes.
- Consider a Prenuptial or Postnuptial Agreement
Many people do not realize that prenuptial agreements can play a significant role in estate planning, in addition to planning property division in the event of a divorce. Typically, individuals enter second marriages later in life with more assets and debts than when they married their first partner. In a Phoenix prenuptial agreement, you can clearly identify each spouse’s separate property (assets and debts) and include terms regarding your testamentary wishes(e.g., wife and/or husband agree in their Will, Trust or by other means to provide “x” to their surviving spouse).
- Retitle Assets
Individuals entering into their second marriage in Phoenix should consider whether they want to retitle any of their assets (e.g., home, vacation home, bank accounts, etc.). For example, as a newly married couple, there may be assets that you want to own together as joint tenants. Full ownership of property held in joint tenancy with right of survivorship directly to the surviving owner at the other owner’s death. It avoids the time and expense of probate.
- Avoid Family Conflict
Creating an estate plan is critical to reducing family discord at your death. It is common for emotions to run high with blended families, especially if your new spouse and children do not have the closest relationship. Making your intentions clear in your estate plan and communicating these wishes to your family before your death will significantly reduce the risk of fighting.
Your Phoenix Estate Planning Attorney
Nicole Pavlik is an experienced Phoenix estate planning attorney who help you create a comprehensive estate plan. If you have questions about second marriages and estate planning, call Nicole Pavlik Law Firm today at (602) 635-6176 for a free consultation.