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Planning your Financial Future after a Second “I Do”

Are you thinking of getting remarried? You’re not the only one. In 2013, 40% of new marriages included at least one partner who had been married before, and two in ten new marriages were between people who had both previously been married, according to a 2014 study.

But’s article, “Getting remarried? Get a financial plan first,” says that many folks do little planning, and that ends up increasing the conflict and chaos that often occurs down the road when “death do us part.”

Most don’t get that marriage automatically gives significant rights to the new spouse. They’ve never heard of spousal elective shares or homestead rights, and have not thought of the effect of their remarriage on their estate when they die.

For example, in some states, the rights that a spouse automatically gains upon marriage may include:

  1. The right to be the guardian for the other spouse;

  2. The right to be the personal representative of a deceased spouse;

  3. A right to an “elective share” percentage of the other spouse’s estate;

  4. A right to the ownership or use of the house;

  5. A right to personal property of the deceased spouse, including heirlooms;

  6. An automatic right to be a beneficiary of the deceased spouse’s ERISA accounts; and

  7. A right to be supported under state filial support laws.

The simple fact is people just don’t like dealing with these issues, whether it’s their first marriage or their fifth time around. But if you plan on getting remarried, or already have, here are some of the things to keep in mind:

Consult an expert. State laws vary, and people thinking of a remarriage should meet with a qualified estate planning attorney to understand what their rights are and how to handle those rights and powers.

Get a prenuptial. Folks getting remarried should think about getting a prenuptial agreement, especially if they have a home or business they want to pass to their descendants from an earlier relationship or if each spouse wants to retain the right to pass on their personal investments and property to their respective descendants. Once married, if a new spouse dies without a prenuptial agreement, the surviving spouse will get to inherit what state law allows (a spousal right of election). Even if the deceased spouse leaves assets to children from a prior marriage, it won’t fly without a waiver of the spousal right of election—a document which is frequently signed in conjunction with a prenuptial agreement.

Get your fair share. There are two ways in which a surviving spouse can get an intestate share of a deceased spouse’s estate. First, if a married person dies without a will, then the surviving spouse is entitled to a share of the estate—generally limited to the intestate estate; and if the decedent leaves no descendants, then the surviving spouse will usually get 100% of the intestate estate. Where you live matters: in some states, the surviving spouse gets a minimum dollar amount or minimum percentage of the intestate estate, even if there are surviving descendants or surviving parents. Second, in most states, if the decedent’s will existed before a marriage and was not made in contemplation of the marriage, the new spouse is entitled to an intestate share of the estate.

Reference: (March 10, 2016) “Getting remarried? Get a financial plan first”

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