Estate planning is a tricky subject for blended families, particularly when both spouses have been married before. This situation raises critical questions and planning opportunities for both spouses to get on the same page and understand the impacts of planning for children from the previous marriage at the same time as the spouse or children in the new marriage.
If you need to complete estate planning for your loved ones in Fair Oaks, California and need support for these advanced planning concerns, make sure to schedule a consultation with a trusted estate planning lawyer immediately. What seems like minor mistakes or omissions now from tabling this issue could lead to unwanted transfers of assets if you were to pass away.
Can a Spouse Impact the Transfer of Property Inherited by or In Use By the Other Spouse?
Imagine that you and your spouse currently live in a home or own a vacation home with the other spouse’s name on the title. In your spouse’s estate planning, they specify the intention to leave the home to you, but perhaps they also have wishes or concerns over what happens to that property once you pass away.
The critical distinction here has to do with the wording of this language in the will. Giving the property to you is different from allowing you to live in the property while you’re still alive. In the first case, you become the legal owner of that property and can choose to do what you wish with it during your life and in your estate planning. In the second case, however, you are only granted the ability to live within the home for the rest of your life or a set period named in the will. At this point, the house might transfer to another owner based on your spouse’s original estate planning.
What Tools Are Used to Protect My Children And My Current Spouse?
The most basic estate planning tool you’ll need is a will. Still, when you wish certain people to be protected and others to receive something specific or nothing at all, you’ll want to use a living trust for most blended family situations.
The default in California is that a surviving spouse of someone without a will is entitled to a substantial portion of the estate. A common concern with second or subsequent marriages is that the new spouse will not share or distribute these assets to children on their own. Suppose a decedent in California passes away with no biological or adopted children, siblings, or parents. In that case, the spouse will get all community property (property acquired during the marriage except for specific inheritances) and separate property. Using a will or a trust empowers the creator of that document to specify what property they want to be given to which person.
Using a living trust allows you to pass on what you deem appropriate for your current spouse. Suppose you wanted to give your spouse assets to support them but want to ensure that any assets still in their possession at the time of their death go to your children. In that case, you might use a qualified terminable interest property trust within your living trust plan. This enables your spouse to access income generated by the property inside the trust.
If you’re mostly concerned about protecting the assets your children would receive, use an irrevocable life insurance trust to establish a clear transfer of a specific policy value to your children.
Divorce or New Marriage: When To Update Your Estate Planning Documents
At a bare minimum, you should meet with a Fair Oaks, CA estate planning lawyer once your divorce is final, but there are benefits to having a consultation while your divorce is still pending. Once you and your first spouse have separated, the existing documents and plans will still apply until you update them. This includes both direct estate planning documents like a will or revocable trust and beneficiary designation forms filed with life insurance companies or brokerage accounts.
During a pending divorce proceeding or immediately after, you’ll likely want to remove your previous spouse from any estate planning documents and update those beneficiaries to children or other family members.
If you get remarried to someone else, this is another critical opportunity to meet with an estate planning lawyer to work through any updates that must be made based on these issues. It’s common to want certain assets in your estate to go to your new spouse, any children from that new marriage, and children from your previous marriage. This is a complicated estate planning situation. The details matter, so it’s strongly recommended you work with a lawyer to help you create the plan that aligns with your individual goals.
Contact California Probate and Trust, PC to Get Answers To Your Estate Planning Questions
Have further questions about how you can update or revoke previous plans and craft plans for your loved ones at your discretion? Preserve your peace of mind and family relationships by discussing your options with a Fair Oaks, CA estate planning lawyer, California Probate and Trust, PC. Call us at 916-674-2066 or complete the form on our website to schedule an appointment.
Be sure to download our free guide, The 7 Reasons Why You Need An Estate Plan. Or, call our 24-hour hotline at (916) 306-0388 and leave us your name, phone number, and mailing address. We’ll send the guide to you ASAP.
Listen to California Probate and Trust, PC Dustin MacFarlane explain the difference between a will versus a trust EMBED SOUNDCLOUD PODCAST HERE
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