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Caring For Generations

Estate Planning the Second Time Around

On Behalf of | May 2, 2016 | Estate Planning

Planning for the traditional nuclear family is straightforward, as the Texas Probate Lawyer so aptly points out.  In most situations, the husband and wife want to leave the estate to the surviving spouse, with the assets going to the children after the death of both spouses.  In fact, there’s a nickname for this common estate planning arrangement: the “sweetheart disposition”.

Estate planning for second marriages (after divorce or death of a first spouse), especially when there are children from prior marriages, is a lot more difficult. The spouses will typically want to provide for their surviving partner, but, “at the end of the day,” explains, “they want to be sure the assets end up with their children (not the surviving spouse’s children).”

There are problems with beneficiary designations as well, cautions. “More than likely, the estate planning methods you relied on in your first marriage will not work now.”

  • Many people name their spouse as beneficiary of life insurance policies, IRAs, and other retirement plan accounts.  That allows the spouse-beneficiary to name anyone he/she wants as new heirs, bypassing your children.
  • If your new spouse is much younger than you are, your children may be waiting for many years before receiving an inheritance from you.If one spouse becomes ill and needs to apply for Medicaid, the combined assets of the couple will be considered “available” to pay for care.

Historically, says Ann Margaret Carrozza, writing in the Huffington Post, the compromise solution for second marriage estate planning has been to provide that the estate be held in trust for the lifetime benefit of the surviving spouse, with the widow/er receiving income and perhaps even some principal from the trust assets.

State law comes into play as well, preventing a spouse from being totally disinherited, giving him/her no less than the greater of $50,000 or 1/3 of the entire probate estate.

As Carrozza remarks ruefully, “Love may be lovelier – but it is also a whole lot more complicated the second time around.  Everybody wants to do the right thing for everyone involved: both spouses, his children, her children, and sometimes grandchildren. At Geyer & Associates, our goal is to help create the perfect, tailor-made, plan for each of our clients, especially those in second marriage situations.. 

– by Corinna A Smith of Rebecca  W. Geyer & Associates