Estate planning for second marriages (after divorce or death of a first spouse), especially when there are children from prior marriages, is a challenge. One big part of that challenge is planning for the primary residence.
Whereas couples married for the first time tend to own their home in joint name, in a second marriage situation, the primary residence is commonly titled in one party’s name, notes Ann-Margaret Carrozza, writing in the Huffington Post. “Thought must be given to the survivor’s living arrangements upon the death of the owner of the home”.
The most common remedy, Carrozza explains, is to grant the non-owner spouse a life estate in the home. “This approach makes intuitive sense, but can sometimes have unwanted consequences,” she adds. The family would be unable to either sell the home or use it, even if the surviving spouse were to
- move away
- get remarried
- end up in a nursing home
A better option, the author adds, would be to grant the surviving spouse “rights of occupancy”.
From a practical point of view, Carrozza reminds readers, the divorce rate for second marriages exceeds 60%, so, beyond establishing who gets what in the event of death, prenuptial agreements can be used to address all these financial issues that tend to arise in second marriages.
At Geyer & Associates, we’ve found that to be very good idea. As hard as couples may find it to discuss money matters, death, and children’s inheritances, communicating on these sensitive areas, particularly when done with an estate planning professional as moderator and guide, can actually work to strengthen the relationship.
In fact, it’s been our experience that the biggest benefits of prenuptial agreements – whether used in first marriages or second – come about because of the conversations that go into creating them!
– by Kimberly Lewis of Rebecca W. Geyer & Associates