After a divorce, you may have felt like you would never meet someone to share your life with again. But then it happened, you found a new partner, and you are excited about building your life together.
Now that you are a little bit older and wiser, you may have realized your new marriage will require a thorough review and a reconfiguring of your estate plans. Here are the things you should consider when reviewing your estate plans after a second marriage.
Have a discussion with your new spouse
Have a conversation about finances and goals. You may have financial obligations to your former spouse, like spousal support, or perhaps he or she was awarded part of your retirement account. Let your new spouse know about any former obligations, so you can plan around these obstacles.
If you have children from a prior marriage, you may have specific assets you want to leave for them. Let your partner know about these desires, so it does not come as a surprise later. Perhaps your new spouse has kids too, and he or she wants to leave certain things for them as well. All these considerations will need to be included in estate plans.
Decide how to handle assets—shared or separate
Maybe you have already discussed whether you will have joint bank accounts or keep some accounts separate. Consider all factors involved when you make this decision. Alaska is an equitable distribution state, so all assets acquired during a marriage are considered marital assets. Property you bring into a marriage is generally considered separate property and is only owned by you.
If you want to pass a home you own on to children from a former marriage, you may want to continue to keep this as a separate asset. You could place the home in a trust, so it passes easily to your children.
In Alaska, jointly owned property automatically passes to the surviving partner after the other owner passes on. This is called the right of survivorship. Discuss whether you want your shared home to pass to your partner, or you could also pass this along to other beneficiaries through a trust.
Consider opening accounts with special designations
You can make designations on bank accounts to direct who the funds go to, after you pass. In Alaska, you add a payable-on-death designation to accounts and name the person who will inherit the money after you pass. This allows the money to bypass probate, and you could name someone other than your spouse on this account. Or you may choose to name your spouse, but want to allow him or her to avoid probate to receive these funds.
Remove former partner from any beneficiary information
You and your new partner should also go over all your retirement accounts, life insurance policies and anything else with a beneficiary designation. Remove your former partners as the beneficiary on all these accounts. You may choose to designate your new spouse as the beneficiary, or you could decide to name your children or other heirs. Fidelity Investment warns if you place your new spouse as the beneficiary, he or she can choose anyone they want to inherit what is left when he or she passes. That may or may not include your children from a former marriage. Decide whether this a concern for you.
You may feel uncomfortable having some of these conversations with your new spouse. This may be particularly true if you want to leave significant assets to children from a former marriage. Consider contacting an experienced estate planning attorney. An attorney can help you explain your wishes to your partner and the rest of your family. He or she will also make sure the documents are legally sound and will help you accomplish all your goals.