Your first marriage introduced new complexities into how you made plans to preserve your wealth and provide for yourself and your family well into your golden years and beyond. When it ended, you needed to further adjust your estate plan to stay on track to meet your financial goals later in life. Now, you’re getting married again, and it’s time to revise your estate plan again. But estate planning for second marriages isn’t easy—in fact, it can be even more complex than it was during your first marriage, especially if you and your new spouse both have children from a previous marriage.
With decades of expertise in Tennessee estate law, the legal team at MHPS Law is here to answer your questions about planning your estate for second marriages and blended families so you can secure your family’s future with confidence.
What makes estate planning for blended families and second marriages more complex?
The heart of what makes estate planning for second marriages so complex is that this isn’t your first rodeo; it might not be your spouse’s first rodeo, either. If one or both of you have children from a prior marriage, those stepchildren have to be taken into account, and conflicts of interest between children and stepchildren can make planning your estate much more challenging. If you divorced your previous spouse, you may have financial or legal obligations from that previous marriage, such as alimony or child support.
What is “fair” in a second marriage for estate planning?
In his 1877 novel Anna Karenina, Leo Tolstoy asserted that “All happy families are alike; each unhappy family is unhappy in its own way.” With respect to one of the world’s great novelists, Tolstoy was not in the business of estate planning for blended families. Because no two families are the same, happy and unhappy families alike can face difficulties figuring out what a “fair” distribution of assets in an estate plan looks like.
While the exact shape a “fair” estate plan will take varies, it should meet the following criteria:
- Providing financial security for a surviving spouse without disinheriting children from a previous marriage.
- Dividing assets in a way that reflects contributions from both spouses.
- Using trusts to set aside specific assets for biological children while ensuring the surviving spouse is supported.
- Communicating openly with family members to prevent disputes.
What is a second spouse entitled to?
One of the thorny issues that makes estate planning for second marriages so challenging is the need to balance the needs of your second spouse with your first. Under Tennessee law, a second spouse has an entitlement to an elective share of the deceased’s estate—but not assets acquired before the marriage, unless said assets became jointly owned in the marriage.
If you pass on intestate (without a will or estate plan), your second spouse and children receive a statutory share of your estate, which can reduce the inheritance of any children from your first marriage. If your spouse is left out of your estate plan for any reason, they may still have a right to an elective share of your estate, based on the length of your marriage.
How can I protect the interests of current and previous spouses?
As you can imagine, without an airtight estate plan that takes these matters into account, the entitlements of your current surviving spouse and previous spouse(s), along with the inheritance of your children and stepchildren, can come into conflict.
To balance the interests of previous and future spouses, you can use prenuptial and postnuptial agreements with your future second spouse to lay down clear expectations for asset division and inheritance, along with clearly defined wills and trusts to outline asset distribution and minimize the risks of legal disputes.
The estate plan for your second marriage can also make use of life insurance policies with designated beneficiaries to separately provide for surviving spouses and ex-spouses, as well as children.
What are children from a previous marriage entitled to?
Unless specified in your estate plan, children from a previous marriage are not automatically entitled to an inheritance if the surviving spouse and the children from your second marriage inherit most or all assets. If this doesn’t sound fair to children from your previous marriage, then some smart estate planning can make sure they are included.
For example, an estate plan for blended families can use trusts to set aside assets specifically for children from your previous marriage or name them as beneficiaries to specific life insurance and retirement accounts. With an estate plan, you also avoid intestacy laws which would prioritize your second spouse and children from your current marriage over children from your first marriage. To reduce conflicts over your estate when you pass away, you can also gift assets to children from your previous marriage during your lifetime.
How to Divide Assets in a Blended Family
Because every family is different, and blended families are even more different, there is no one “right” way to divide assets among your spouse and children from your current and previous marriages. However, there are best practices to ensure that your and your spouse’s children and stepchildren are treated properly.
At MHPS Law, we’ve seen four unique categories of asset division in blended families, each of which is suitable for families of different shapes and sizes. Family lawyers with expertise in estate planning for second marriages can help you figure out which will work best:
- All One Happy Family: Assets are divided equally between all children and stepchildren on both spouse’s sides. No one gets any special treatment.
- By Each Family Tree: Half of your combined assets are given to each side of the family tree, and further divided equally among the father’s children and mother’s children.
- Who Brought What: Assets are divided based on who brought what to the marriage. For example, if the husband brought a specific bank account into the marriage, his children get it; if the wife brought real estate property into the marriage, her children get it.
- Something Else: None of the three above formulas accommodate the family’s circumstances; for example, if one child has special needs.
How your estate plan divides and distributes your family’s assets is up to you. Estate planning specialists can help you ensure that whatever plan you decide on will be faithfully executed with minimal risks of disputes or conflict.
What type of trust is best for a blended family’s estate plan?
For single individuals and those in their first marriages, wills are often sufficient for distributing assets after you pass away. However, the complexity of second marriages and blended families can easily outpace what wills are capable of handling. A trust or a combination of different types of trust generally do a better job of distributing assets fairly and sensibly along complex family lines—especially if there are investment or business assets thrown into the mix.
Estate plans for second marriages will frequently use Qualified Terminable Interest Property (QTIP) Trusts. These trusts distribute assets first to your spouse if you pass away before them; then, when they pass away, the remainder is passed to your children. As part of your estate plan, QTIP trusts ensure that both your spouse and children can support themselves after you pass away.
Ensure Fairness and Security in Estate Planning for Blended Families and Second Marriages with MHPS Law
Combining decades of experience in Tennessee family law and estate law with a commitment to personalized and compassionate legal service, the team of attorneys at MHPS Law is here to help you preserve your wealth and provide for your whole family long after you’ve passed on. Reach out to our Nashville office today to get started. Schedule a Consultation
