What happens when a parent remarries and carries out financial plans the typical way most married couples do? The new spouse is assigned 100% beneficiary to retirement accounts and life insurance policies and joint ownership with rights of survivorship is established on all other assets. Both husband and wife seem to have a good relationship with the step children and promise that if anything were to happen to the other, they would make sure each other’s children would receive their parent’s intended inheritance. There must be trust in a relationship – seamless, right?
Things might go well to start, however, as the timeline moves forward things could get messy. The husband dies unexpectedly at the age of 50. Life for the surviving spouse is difficult initially while grieving but eventually they move on and start dating. Five years later a new wedding band is on her hand. The picture slowly starts to change when a new marriage comes into play regardless of the relationship with the prior step children (existing or not).
The original intention and promise to the step children of the prior marriage could fall in the hands of a different relationship with its own complications. As played out before with the first couple, all the normal estate planning changes that go along with a new marriage could occur again – assigning the new husband as beneficiary and titling assets in joint name with rights of survivorship, etc. Another contributing factor is that there is no way of knowing if the new spouse, who is next in line for step children’s inheritance, will retain a good relationship with the original step children. This scenario can easily lead to the step children being disinherited.
The good news is that there is a safer way to make sure a spouse in remarriage is financially provided for without risking your intentions for your children of a prior marriage. Proper planning with a trusted estate attorney and a qualified terminable interest property trust (Q-TIP) can provide for your partner comfortably while including provisions where you can be assured your children will be cared for after as well.
Take the time to align your money with your values- it won’t do it by itself, and your relationships are worth it!
