“The times, they are a-changin'” says a famous Bob Dylan song. This is definitely true regarding family units. Fewer couples resemble the Ward-and-June-Cleaver model. More and more people, as they begin the path of estate planning, are married to a second, third or subsequent spouse. A careful plan can help ensure that you leave that spouse the legacy you intended.
Planning for a second spouse can be more complicated than a first spouse. If you and your spouse married later in life, a greater possibility exists that you each brought your own assets and wealth to the marriage. In addition, you may desire to leave that wealth to your own children from a previous marriage. In some cases, both parties are well off, and do not need anything from the other. Alternately, your spouse may have more limited means and a need for assistance if he/she is widowed.
Regardless of your spouse’s financial condition, state laws exist to prevent individuals from entirely disinheriting their spouses. Wisconsin is a “community property” state, meaning that your spouse automatically has a right to 50% the earnings accumulated by either of you during the marriage (unless there is a written marital property agreement or “prenuptial”).
Another concern for some second marriages involved a desire to care for a new spouse, but not for his/her children from a previous marriage. In the past, some individuals established estate plans that placed assets in a trust for the benefit of the spouse. The trustee distributed assets to the spouse during his/her lifetime and then, after that spouse died, the trustee distributed the remaining assets to the trust creator’s natural children.
If you and your spouse agree to such a trust arrangement, or agree that he/she will receive nothing (or very little of monetary value) from your estate when you die, it is important to obtain your spouse’s consent in writing. A prenuptial or postnuptial agreement can be effective at documenting this consent.
Another important aspect of estate planning regarding second marriages may include your residence. In many situations, a homeowner may desire and intend for his/her new spouse to have the right to live in the home for the rest of his/her life, even if that spouse outlives the homeowner. The homeowner may plan that the property go to his/her children after the death of the spouse.
One frequently used approach is to grant the new spouse a life estate in the property, with the property going to the children thereafter. This plan can be fraught with complications in some circumstances, though. Should your new spouse survive you, but require nursing home care, your family might be forced to rent the property and use the proceeds to pay for the nursing home care.
Estate planning for families with a situation more complicated than just “Mom, Dad and the kids” requires detailed knowledge of estate planning law. A Wisconsin estate planning attorney can help extensively in ensuring you provide for both your adult children and your new spouse. Madison trust attorney Daniel J. Krause of Krause Law Offices LLC has years of experience with all manner of trusts and wills, and the dedication to ensuring clients’ plans reflect their goals. Consult Attorney Daniel J. Krause to find out how to plan your estate today.
Contact us through our website to schedule your confidential, no obligation initial consultation.