Estate Planning for Second Marriages in New York.
Proper estate planning is imperative considering the current extremely high divorce rate in New York State. When either a single spouse or both spouses in the second marriage have children from the first marriage, a New York State Estate Planning Lawyer can help protect the children from the first marriage. It is important to note that second marriages may produce differing goals on inheritances, financial planning, long-term care, and more, thus an experienced Estate Planning Attorney can be very helpful in this matter.
Preparing Wills Together Is Not The Best Way to Protect Your Child.
A common misconception in estate planning during the marriage is that preparing a will together between both spouses will protect the children of the first marriage by leaving the estate of the first parent to die to the survivor and then dividing that estate amongst the children of the two parents in equal shares. However, creating a will together does not guarantee that your children from the first marriage will be protected. Upon the death of the first spouse, the second spouse has the ability to change the original will or can partake in various actions that will counter the original intention stated within the will. An example of this would be retitling assets in the name of the surviving spouse and their children for the first marriage. Another example would be changing the beneficiary designations so that they only apply to the spouse’s children, which evidently counters the original intentions stated in the will. Many spouses will claim that they would not take part in such actions, however there is no guarantee of this affirmation, as original intentions may change in relation to changing circumstances.
Utilizing a Trust in the Form of Proactive Planning
Proactive Planning is the best way to guarantee that the original estate plan will be carried out without any potential manipulation and changes of this plan, which could occur in a will formulated together by both spouses. A NY Estate Planning Lawyer can assist you in the creation of a trust that will hold assets under the control of a selected trustee. The surviving spouse is eligible to have access to the income within the trust, along with principle based on the circumstances of the case. Upon the death of the second spouse, the trust will be distributed based upon the original intentions and wishes of the couple. This trust is known as a Qualified Terminal Interest Property Trust, which is extremely effective in terms of estate planning for a second marriage. An experienced estate planning attorney can assist you in creating this trust as well as irrevocable joint living trusts and agreements to make wills upon request.
Naming Beneficiaries and Using a Trust as Beneficiary
It can often be difficult to name beneficiaries for life insurance policies, IRA’s, and other income plans when creating an estate plan within a second marriage. It is important to note that a new spouse is eligible to select anyone they please as a new beneficiary after the passing of a spouse, even in the case that promises were made regarding not making any changes. To avoid conflict after the death of a spouse, a NY Estate Planning Attorney will encourage naming a trust as a beneficiary for tax-deferred income plans. This allows the spouse to control whom the assets will be distributed to. Utilizing a trust guarantees protection from irresponsible spending, creditors, divorce, and estate taxes.