Posted by & filed under Special Estate Planning Issues.

Before You Get Married for the Second Time, You Ought to Think About….

It still surprises me that many people spend no time considering property issues before they get married for the second time. Clients in second marriages come to have new Wills drawn. Each partner comes with his/her own idea about how assets should be distributed, but they have not discussed this between themselves.

For example, Max and Irma have been married for two years. Max has one child from a previous marriage, and Irma has three children from a previous marriage. They have no children together.  Max and Irma tell me they agree that, at the death of the first to die, everything should go to the survivor. When I ask what happens after the second death, Max replied that the assets should be split 50-50; his daughter should receive 50% and Irma’s three children should split “her” 50%. Irma immediately became tense, and replied that each child to receive an equal quarter. Their discussion heated up quickly, and our conference ended when the husband became so angry that he simply left the building, got in his car, and drove away. Max and Irma never came back and completed their estate plan with me.

Then there is Fred and Wilma, who are in their early 70s. They have been married over 10 years, after each was widowed. Fred has two children, and Wilma has three. Fred explained that the house had been “his” house, that Wilma’s name did not appear on the deed, and that Fred wanted to be sure Wilma could live in the house after Fred died for so long as Wilma lived. When I asked what would happen to the house after the second death, Fred replied that it should be sold and the proceeds divided between his two children. Wilma was visibly taken aback at Fred’s response, and asserted that she had contributed to the marriage and that the proceeds from the sale of the house after the death of the second of them to die should be split with one-half to be divided by her children, and the other half to be divided by Fred’s children. I suggested that they should discuss that matter between themselves privately and let me know their decision.

These two stories illustrate the importance of having this discussion prior to a second marriage. Issues such as identifying assets as “her” assets or “his” assets prior to the marriage will take away the discomfort of learning, after some time in the marriage, that the spouse feels strongly possessive of certain assets. Division of assets after the second death should also be discussed and decided upon prior to the marriage. Couples should discuss these and other estate planning issues (for example, care-giving) before their second marriage.

Phylicia’s father (Dick) has been married to Phylicia’s step-mother (Jane) over 30 years. Dick has become infirm, and there is disagreement between Phylicia, Jane, and Jane’s daughter, as to who should be Dick’s primary care giver – should it be Phylicia, Jane, or Jane’s daughter? This issue is being decided in a court proceeding, which is both expensive and emotionally taxing.

But then there are Jack and Jill. They talked about estate planning issues before they got married Their estate plan involves a Revocable Trust, which provides that after the death of the first of them to die, the Trust will become irrevocable so that the survivor cannot change the distribution plan in the Trust. The Trust says that, after the death of the first to die, the survivor gets all trust income plus a limited power to take some of the trust assets annually. After the death of the survivor, assets are distributed to children as the parties have agreed. Although this specific estate plan is certainly not for everyone, Jack and Jill show that carefully discussing these issues, then creating an estate plan to reflect their intent, can be done and avoids hurt feelings and squabbles later in the marriage.

If you are thinking about a second marriage or know someone who is, please do that person a favor and see (or encourage your friend to see) a competent estate planning lawyer, such as John Grundy, to address estate planning issues prior to the wedding.