01 Jun How to Plan Estate in a Second Marriage?
A second marriage can be a fresh start for you, but you should also consider how your new blended family will fare. How you plan your estate and finances afterward can have a lasting impact on your future happiness and the happiness of your children.
What You Should Consider When Creating an Estate Plan for A Second Marriage
By understanding some critical financial issues surrounding your second marriage, you can create a new estate plan or adjust an existing one appropriately. Here is a simple guide that can help:
The first thing you and your new spouse should do is take inventory of individual debts and assets and share them. Also, disclose life insurance policies and retirement plans. The more honest and open you are with one another, the better the estate plan will be.
Create an AB Trust
If you cannot agree, consider getting an AB Trust. This trust splits a married couple’s assets into two separate ones – Trust A and Trust B. It should be established when you and your spouse create an independent last will or a Living Trust. You can decide how you want to divide assets between the two during that time.
With an AB Trust, you can rest assured that your spouse and all of the children in your blended family are taken care of if you or your spouse pass away. Trust B assets are subject to estate taxes, but these will be accessible to the surviving partner. If both spouses die, A Trust assets will be taxed only. A joint estate plan will void the AB Trust.
Controlling Your Spouse’s Access to a Trust
A trust can help you maintain control over your assets and ensure your beneficiaries receive what they deserve. An AB Trust is fully revocable by both spouses until either spouse dies. A portion of the assets is placed in a revocable trust for the survivor when that happens; usually, all of the surviving spouse’s separate property and half of the community property are allocated to the revocable “Trust A.”
The remaining assets go into an irrevocable “Trust B” on the deceased spouse’s behalf; this usually includes all of the deceased spouse’s separate property and the other half of the community property. Establishing the irrevocable B Trust ensures that the surviving spouse cannot change beneficiaries to that half after you pass away.
Create a Living or AB Trust with help from Contact Guideway Legal Documents & Mediation Services
Did you know that 67% of Americans have no estate plan? If you are part of that statistic, who will care for your family when you are gone? At Guideway Legal Documents & Mediation Services, we understand how complex asset and debt division can get for blended families and are here to help. Our Legal Document Assistants can aid you in all legal matters by helping you prepare and manage necessary documents to establish a trust. Get in touch with us today!