How Do I Keep From Disinheriting My Kids When I Remarry?

Roughly 17% of people remarry after the first marriage ends, and the rate of remarriage has decreased over time for all age groups except the 55-and-older group. That rate was 57% in 2013 compared to 42% in 1960. CNBC brings up some practical pointers in its recent article, “Remarried after having kids? Here are tips to avoid accidentally disinheriting them.” As the article notes, if you’ve remarried and want to pass on assets to your children from a previous marriage, don’t overlook the importance of estate planning.

Many people don’t have even a basic will or trust. The risk can be higher, if you have no estate planning when you remarry—your children could unintentionally be disinherited.

The older you are when you remarry, the more apt you are to be bringing assets into the marriage, such as retirement savings, life insurance, brokerage accounts, real property and family heirlooms. Estate planning helps to avoid family conflict.

If you die without a will or trust intestate), a judge will decide who gets what. Of course, everyone’s situation is different, and some can be more complex than others. However, here are some keys to consider, when thinking about how to make sure your heirs end up with the assets you want them to have.

Account beneficiaries. It’s easy to miss this when you remarry. Update the beneficiary designations on retirement accounts, life insurance policies and other accounts. This designation supersedes any intention stated in your will. Also, if you have an account that is governed by ERISA, such as a 401(k), your new spouse will automatically inherit the account unless they sign a waiver, regardless of who you list as beneficiaries.

Your home. Remarriage frequently involves a jointly-owned home. Depending on state law and how the property is titled, your intention for your children to inherit your share of it could be thwarted.  If the house is deeded as “joint tenancy with right of survivorship” or “tenancy by the entirety,” the property typically automatically belongs to the surviving spouse, regardless of what your will says. If you own the house in “tenancy in common,” you can leave your share to a person other than your spouse, if you want. With a trust, you have many more options, including letting the new spouse live there for the rest of their lives, with the property going to your children when they die.

Your personal property. If you want your children to get some particular items when you pass away, be as detailed as possible in your will, so there is no room for confusion.

Power of Attorney. Select someone to handle your finances, if you reach a stage where you can’t. A durable power of attorney for your finances allows that person to be in charge of paying bills and filing tax returns.

Advance Healthcare Directive. This states your wishes if you’re placed on life support or suffer from a terminal condition. It helps guide your proxy’s decision-making, and if you have no one named, your doctors must follow your wishes in that document.

Creating an estate plan can help ensure that your assets wind up where you want, and your wishes are carried out fully.

Reference: CNBC (January 17, 2019) “Remarried after having kids? Here are tips to avoid accidentally disinheriting them”

Suggested Key Terms: Estate Planning Lawyer, Wills, Asset Protection, Probate Court, Inheritance, Power of Attorney, Healthcare Directive, Living Will, Intestacy, Pension, Tenancy by the Entirety, Tenancy in Common, Joint Tenancy, Beneficiary Designations, Life Insurance

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