Estate Planning and Second Marriages

Wondering about estate planning and second marriages? I seem to get this phone call several times per year: “I got married a couple of years ago. I own my own house and have my own bank accounts and I want it all to go to my adult kids, not my new spouse.” My question is always – “do you have a pre-nup?” The answer is usually “no” (otherwise they would not be calling me).

I had one person tell me that she went to an attorney to discuss having a trust or a pre-nuptial agreement prepared (she wasn’t sure which one she needed) and the attorney told her she didn’t  need anything but a Will which left everything to her kids. I find it hard to believe that an attorney who supposedly is experienced in Wills & Trusts could give such bad advice, but who knows what the real conversation was between the two of them? Sometimes, people just want to hear what they want to hear.

If you live in FL, and you are contemplating getting remarried (and have minor or adult children), here is what you need to know. When you get married, if you do not have a pre-nuptial agreement, but you keep your assets separate (meaning, your new spouse’s name is not on your house, bank accounts, etc.,) and your new spouse does not contribute to the upkeep of the asset (such as a house), then if you divorce, the assets are considered non-marital property and the spouse gets none of those assets. If you die, however, and you do not have a pre-nuptial agreement, then the situation gets complicated.

The purpose of a pre-nuptial agreement is to establish what assets a couple brought into the marriage and what happens to those assets if the couple gets divorced or if one of them dies. Without a pre-nuptial agreement, if one person dies owning assets without the other spouse’s name on them (or without the other spouse being the beneficiary of the asset), several things can happen. If the decedent spouse had a Will leaving the assets to someone else (including adult children), the surviving spouse is considered a pretermitted spouse and is entitled to receive probate assets as if the decedent had died without a Will (i.e., intestate).  When someone dies intestate, the surviving spouse is entitled to 100% of the probate assets, if the decedent did not have children who are also not children of the surviving spouse.  If the decedent died with kids who are not surviving spouse’s kids, the surviving spouse gets 50% of the probate assets, and the children of decedent share the other 50%.  This doesn’t include the homestead.  If the decedent owned a house and the surviving spouse is not on title to the home, the surviving spouse can elect to take a 50% interest in the house (with the other 50% going to the decedent’s children), or the surviving spouse will get a life estate in the house (meaning he/she has the right to live in the house for the rest of their life).

What if the decedent does not have any assets going through probate?  Maybe he/she had a trust with all the assets titled in the trust, or maybe he/she had named his/her kids as the beneficiary of all his/her assets.  In that case, where there is no pre-nuptial agreement, the surviving spouse can opt to take an “elective share” of the estate, or 30% of the assets. The elective share includes assets which go through probate, assets held in a revocable trust, cash value of life insurance, assets transferred within one year of death, joint bank accounts or payable on death accounts, pensions and retirement plans and property which passed directly to the surviving spouse.

So, how do you make sure your assets go to your children and not your new spouse?  The best way is for both you to sign a prenuptial agreement before you get married.  You can sign one after you are married – this is known as a “postnuptial agreement”.  Either way, if you are concerned about your new spouse’s rights to your assets (or making sure your children receive their share), I strongly recommend speaking with an estate planning attorney who can advise you before you get married.

If you have other questions about estate planning, please call Board Certified Elder law attorney, Laurie E. Ohall, to set up a free 15 minute phone consultation. Contact Ms. Ohall today if you need estate planningelder lawprobate or guardianship assistance.