Austin Texas Estate Planning Blog

What Should Seniors Know before Remarrying

What Should Seniors Know before Remarrying?

March 14, 2023 • | Law Office of Zachary D Kamykowski, PLLC
As the calendar turned to 2023, many of us took a moment to think about resolutions. I want to lose 10 pounds. I want to read things that aren’t just about work. I want to learn how to play pickleball. Or maybe this year I’ll give a relationship another shot. Maybe I’ll even remarry.

Seniors, in particular, think about remarrying with an understandable degree of concern. Maybe your last relationship ended in a divorce, or there’ve been too many dating disasters. However, according to a recent article from MSN, “Planning to remarry after a divorce? 6 tips to protect your financial future,” there are some steps to take to make relationships easier to navigate and protect your financial future.

Not all of them are easy, but all are worthwhile.

No marrying without a prenup. Who wants to think about divorce when they’re head-over-heels in love and planning a wedding? No one. However, seniors should know before remarrying to think of a prenup as about the start, not the end. It clarifies many issues: complete financial clarity, financial expectations, and precise details on what would happen in the worst-case scenario. Getting all this out before you say “I do” makes it much easier to go forward.

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Trust…but verify. Estate planning ensures that assets pass as you want. By setting up a revocable living trust, you can ensure your assets pass to your offspring. Unlike a will, the provisions of a revocable trust are effective not just when you die but in the event of incapacity. A living trust can provide for the trust creator and their children during any incapacity before death. At death, the trust ensures that beneficiaries receive assets without probate.

Consider life insurance. Life insurance, possibly held in an irrevocable life insurance trust (ILIT), which allows proceeds to pass tax-free, can be used to provide funds for a surviving spouse or children from a prior marriage. Seniors should know before remarrying that they need to review all insurance policies, including life, property, casualty, and umbrella insurance, to be sure you have the correct coverage in place and insurance policies are titled correctly. Finally, ensure that you continue to pay the premiums.

Estate planning. While you are planning to remarry is a good time to check on account titles, beneficiary designations, and powers of attorney. Couples should review their estate plans to be sure planning reflects current wishes. Married couples have the benefit of the unlimited marital deduction, meaning they can gift during their lifetime or bequeath at death a total amount of assets to their U.S. citizen surviving spouse without any gift or estate tax. Unmarried couples must use different estate planning techniques to pass the maximum amount to their partners tax-free.

Check beneficiaries. After a divorce and before a remarriage, check beneficiaries on 401(k)s, pensions, retirement accounts, life insurance policies, Power of Attorney, and Health Care Power of Attorney documents. You should also check the beneficiaries of life insurance and retirement plans. If you remarry, a prenup agreement or state law may require you to give some portion of your estate to your spouse, so have an estate planning attorney guide you through any changes.

Choose trustees wisely. Consider the advantages of a corporate trustee, who will be neutral and may prevent tensions with a newly blended family. If you name an outsider as an executor or act as a trustee, they may be able to minimize conflict. They’ll also have the professional knowledge and expertise with legal, tax, and administrative complexities of administering estates and trusts.

Reference: MSN (Feb. 11, 2023) “Planning to remarry after a divorce? 6 tips to protect your financial future.”

Law Office of Zachary D Kamykowski, PLLC

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