With the divorce rate being so high, it is not uncommon for people to be married for a second or third time. However, estate planning and financial decisions can become increasingly complicated as you begin a new marriage after leaving a previous one. This is especially true when you and your spouse create a blended family. Below are five points to consider when planning for the future with your new family.
Considerations to Plan For
1. Commingling finances- It is very common for people to entangle their finances once they marry. For instance, remarried couples may set up joint bank accounts to pay for the mortgage on their house, utilities like electricity and internet, and they may have separate accounts for other expenditures. Commingling funds may put your assets in danger. If you are still financially bound to your former spouse, you may wish to keep finances essentially separate if you share debt with your former spouse. There could be a chance, depending on the creditor and divorce agreement, that you could be obligated to pay the entire amount.
2. Community property or common law sate?- Depending on the state you divorce in, you may keep the assets you brought into the marriage individually or you may co-own it with your spouse. Common law states deem ownership by the control of titles and other ownership documents like registration papers. Things are even more complicated if you own property outside the state you live in.
3. Protection in case of remarriage- It is advisable to create a trust for your children prior to getting divorced in order to protect assets that are meant to go to your children. WHen you or your ex remarry, this can jeopardize their inheritance, especially if the estate must go through probate.
4. Possibility of disinheritance- Again, establishing a trust may be your best option to secure inheritance for your family and other heirs. If you die before your spouse, then this assures the people you intend to distribute assets to will receive them. This may help avoid a long probate process.
5. Who is living in your home?- Complications arise when a blended family is created. Putting your real estate in your trust allows you to choose who may live there once you pass on and will protect your new spouse and children should your previous spouse lay claim to it. It will benefit the members of your blended family and hopefully avoid a battle for the property.
Visit Your Estate Planning Attorney
You may have already created an estate plan before your new marriage. Be sure to revise your estate plan when you remarry to protect your new family. If you do not, then you may not be able to prevent your ex spouse from receiving your assets and refusing your new family any share of them. Call an estate planning lawyer, like an estate planning lawyer Phoenix AZ can count on, today to secure the future for your new family.
Thanks to our friends and contributors from Kamper Estrada, LLC for their insight into estate planning.