Older adults have a wide range of experience in long-term commitments and previous loss due to widowhood, divorce, or breakups. After divorce or widowhood, many Americans choose to remarry, including older people.
With remarriage comes a host of complications, including dynamics among blended families, preservation of wealth for the children of a previous marriage, and a desire to care for a new husband or wife as we grow old and after we pass away. Lesser challenges include updating and changing names on important documentation.
What can you do before you remarry to prevent future problems you may not even have imagined could occur?
Everyone’s situation is unique, but here is a basic checklist that can serve as a starting point. Before you remarry, consult your estate planning lawyer and family lawyer, who can work together.
- You should have updated your estate plan after your divorce or the death of your spouse. Once you are planning to remarry, discuss the overall structure of your estate planning with your attorney, so that you can protect your children’s rights to their inheritance, while also providing support for the new spouse throughout his or her lifetime.
- Your personal property consists of your clothing, digital assets, jewelry, art, frequent flier miles, photographs, heirlooms, and other personal effects and possessions. You can create a personal property memorandum that is incorporated by reference into your will or trust to give specific items to particular persons, or you can give all of your belongings to your beneficiaries via your will or your trust. The will or trust can include a methodology for resolving disagreements and disputes over items of personal property.
- If you think you can cut your new spouse out of your will and/or trust, you are wrong! Consider entering into a prenuptial agreement before you remarry:
- In 2021, nine states were “community property” states. The law in those states provides that any property acquired by spouses (and sometimes domestic partners) is labeled community property, and each spouse holds title to 50% of the asset. Some states, including Minnesota and Florida, allow couples to elect to treat their property as community property. In the remaining states, which are called “separate property” or “common law” states (such as Florida and Minnesota), property acquired during a marriage is owned by the spouse who holds title to the property, unless the married couple has taken the steps to elect to treat their marital property as community property. (Most couples do not make that election, because they do not know about the option. This is something to talk to your attorney about because there may be tax benefits with community property ownership.) In a separate property or common law state, if both spouses hold title, the property would be equitably divided in the event of divorce and would generally pass pursuant to estate planning documents, deeds, or beneficiary designation forms in the event of death. Consult your estate planning and family law attorneys about how these forms of ownership could affect your new spouse’s right to the property when you pass away. Structure your estate plan in a way that protects the interests of children of a former marriage, while allowing your new spouse to have sufficient income to support him or herself when you are gone. Even with a community property system, keeping certain property separate from marital property is possible, if handled properly.
- In forty-nine states, spouses have the right to an “elective share” of their deceased spouse’s estate. In Florida, for example, the share is 30%. In Minnesota, the elective share percentage increases with the duration of the marriage. A fifteen-year marriage entitles the spouse to 50% of his or her spouse’s estate. Unless the new spouse waives his or her right to the elective share, the statute will give the spouse the elective share regardless of what you say in your will or trust. The “estate” is not limited to the property that passes through probate; it includes retirement and investment accounts, as well as other non-probate assets. In order to overcome a spouse’s statutory right to the elective share, the couple must enter into a prenuptial or postnuptial agreement governing the spouses’ share of property upon divorce or at death. Statutes set forth the requirements to create a valid waiver of elective share, and the requirements are different depending upon whether the agreement is a prenup (entered into before marriage) or a postnup (entered into after marriage).
- Most states (at least thirty-seven) give spouses the right to an interest in their deceased spouse’s homestead property. In most cases, the surviving spouse has the right to the homestead for his or her lifetime, after which the property goes to the children or descendants of the decedent spouse; the spouse can elect instead to share title to the homestead with the decedent’s children, fifty-fifty. The public policy behind these laws is to prevent married individuals from disinheriting their spouses or children, leaving them dependent on taxpayer support. Again, homestead rights can be waived in a pre- or post-nuptial agreement. State statutes set forth the requirements for an effective waiver.
- Entering into a prenup is not an indication that you intend to “keep your options open” or that you will refuse to give your new spouse anything if you later divorce. The two of you can design the agreement any way you wish! You can provide that the new spouse receives a certain amount of money or property when you pass away, or if you should later divorce, so that the new spouse feels secure and loved, while you also provide an inheritance for the children of a previous marriage. You can agree to division of assets while you are still feeling loving toward your new spouse, rather than waiting until feelings may have become acrimonious.
- Insurance policies, investment accounts, retirement accounts, and bank accounts usually pass outside of probate to your beneficiaries, which are set forth on the beneficiary designation forms (also known as transfer-on-death or pay-on-death forms) you filled out for those policies and accounts. Update your beneficiary designation forms to make sure your non-probate assets go to the persons you wish, in the percentages you wish. These types of assets are usually included in the property subject to the elective share, so it is important that you and your attorney consider how the assets will be divided fairly upon your death. Balancing out the distribution of your assets among your desired beneficiaries is possible, with careful planning. Note that certain retirement plans (not IRAs) must go to the surviving spouse, unless the spouse waives his or her right, and that renunciation of rights must occur after marriage. An alternative could be to roll the retirement plan into an IRA, so that you can designate a non-spouse beneficiary. Again, this account may be subject to the elective share, so you should consider that possibility in discussions with your attorney.
- If you own separate property entering into a remarriage, and you want to keep it separate, document that ownership and do not commingle that property or funds relating to that property with other funds or property. Keeping proper records is key.
- If you have stored reproductive assets (such as frozen embryos), be sure to discuss those with your attorney as well, in order to circumvent future disputes over ownership of those assets.
- Assess your insurance needs, and remember that life insurance can provide an inheritance to a loved one!