If you find yourself lucky in love after a divorce, you have myriad considerations when deciding whether to remarry. If you have children from your prior marriage that you would like to provide for, I recommend that updating your estate plan be top of mind. A carefully crafted estate plan can function to provide for both your children and new spouse in a way that meets your goals.
Trusts are perhaps the most common estate planning tool used to protect assets and benefit different people. For married couples in particular, a qualified terminable interest property (“QTIP”) trust allows a spouse to enjoy access to assets held in trust during his or her lifetime while limiting the spouse’s ability to control the disposition of those assets after his or her death. This is an effective tool for providing your spouse access to assets for the duration of his or her life while preserving the remainder for your children after his or her death. You may also utilize a QTIP trust in conjunction with other trusts or estate planning vehicles to divide your assets.
Additional advantages to QTIP trusts include qualification for the unlimited marital deduction from state and federal estate taxes. A QTIP trust also gives you the ability to restrict who can ultimately benefit from your assets. What if, for example, your spouse remarries after your death? Without a QTIP trust, any assets your spouse receives from your estate at your death would then be accessible by his or her next spouse upon a subsequent divorce or death.
An alternate option might be to designate your new spouse as the beneficiary of certain assets in your estate. For example, if you name your spouse as the primary beneficiary of your retirement account, this will allow a simple division of assets after your death and will give your spouse near-immediate access to funds. Consider, however, that while this form of planning is easy to implement during your lifetime, your spouse will have unrestricted access to such assets, leaving them vulnerable upon remarriage. In addition, unless all of your other assets are also appropriately titled to your intended beneficiaries or disposed of via a Will or trust, your children or other intended beneficiaries may not benefit from your property in the manner you intend, if at all.
Finally, keep in mind that the law does not allow you to disinherit your spouse absent your spouse’s consent (as through a prenuptial agreement). This means that your new spouse could be entitled to a portion of any estate assets even if you have a valid Will. Proper planning in this regard is imperative.
As always, consult an estate planning attorney to review your goals and the options available to achieve them.