Not everyone experiences just one marriage in their lifetime; some may enter into multiple marriages for various reason like divorce, the passing of a spouse, or personal choices. Incorporating your new spouse into your estate-planning can be a complex matter, especially when children from previous marriages are in the equation.
Understanding the significant consideration surrounding second marriages can help you restructure your estate plan. Here are some factors to contemplate while organising your estate after entering into a subsequent marriage.
1. Impact of Divorce on Existing Wills:
After a legal divorce, your existing Will does not automatically become invalid. However, in the event of a remarriage, it will automatically revoke your existing Will, except when the Will contains a ‘contemplation of marriage’ clause. In such cases, you will still need to create a new Will to address your changed circumstances.
2. Restricting Your Spouse’s Rights:
You have substantial discretion when it comes to restricting your new spouse’s rights within your estate plan, This can involve naming someone other than your spouse as the Trustee, possibly one of your children. You may allow your spouse to receive income from properties held on Trust while prohibiting them from accessing the principal of the Trust.
3. Real Estate Ownership:
If you own real estate, you might want your new spouse to live in the house while ensuring it eventually goes to your children from a previous marriage and by establishing a Trust, it allows your spouse to use the property but at the same time restricting their rights to sell the property. You can also outline whether your spouse can rent the house and manage the rental income.
4. Complexities of Blended Families:
In many cases, it’s spouses from subsequent marriages who establish such Trusts. However, these Trusts may not mirror each other. This scenario can lead to complications when the children from different marriages need to divide the property’s value upon the parents’ passing. They may not know or trust each other, adding to potential future conflicts.
5. Appointing a Trustee:
To navigate through these potential conflicts and complexities, it’s advisable to appoint a Trustee. A Trustee wields substantial authority, managing Trust property and ensuring your spouse adheres to the established restrictions. They can also oversee the appropriateness of payments to your spouse from the Trust. Working with an attorney to draft clear and equitable Trust documents is crucial in the process, as the final decision ultimately rests with you.
In Conclusion,
undergoing a divorce is already emotionally draining and logistically challenging. Rewriting your Will to accommodate your ex-spouse and new spouse can add another layer of complexity. To streamline estate planning, consider appointing a trustworthy and reliable Trustee who can help manage your assets and alleviate some of the concerns you might have in this regard.
