Estate Planning issues for blended families that you must consider before saying I Do
Are you on your second or third marriage with kids, and not sure what to do? Well by the end of this video, you'll have a better idea.
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If you're about to go into your second or third marriage, and you have kids, and your spouse, or your soon to be spouse also have kids, in other words, you guys are about to become the Brady bunch? Then you probably need to look at your estate planning before you tie the knot.
In the United States today, we are seeing more and more blended families every single year. And it's great thing. Single moms and single dads, out there, are finding their true love, and they're getting married for a second or third time. And I think this is fantastic.
One of the considerations you need to make, if you are going into your second or third marriage is what do you you want to have happen to your assets? And the reason if, you are on your second or third marriage you have probably accumulated a significant amount of assets, right? Because during your first marriage you probably bought a house with your first spouse, a place to live with your first spouse. You guys probably had retirement accounts that most likely could have been split up upon divorce. There might be financial accounts that were split up. So you're bringing in a significant amount of assets and money, sometimes, into that second or third marriage.
I know we don't like to think about divorce, but if it is your second or third marriage, then you probably do need to make sure you have a plan in place, if the unthinkable were to happen, and you were to become divorced with your second or third spouse. Before you tie the knot, you need to get your estate plan in place. And that usually means also having a prenuptial agreement in place.
And so what we usually do when an soon to be married family, soon to be Brady Bunch comes into our office is to make sure that each spouse soon to be spouse has a revocable living trust centered estate plan in place with all of their assets in their individual trusts. Then we have them execute a prenuptial agreement in which it explicitly States that everything that is in the wife's trust is hers and everything that is in the husband's trust is his. And we're not going to co-mingle those assets and make them part of the marital estate. That's very important.
Now, when we do that, we always require one of the spouses to have independent counsel. In other words, get their own lawyer to give them advice on that prenuptial agreement. That's very important. And we have another complete video about that. Very important because it goes to intent and whether or not there was coercion. In other words, somebody made them sign that prenuptial agreement. So that's a very important point.
If there's about to be a blended family, then we liked them each to have their own revocable living trust centered estate plan one for the husband one for the wife and a prenuptial agreement in the middle specifically stating that the assets belong to the husband and the assets belong to the wife. Now, two reasons you wanna do that. The first I've already talked about is if the unthinkable or were to happen, and there was a divorce we want to have a document in place that says that everything that the wife brought into the marriage with her will leave with her. And she's not making any claim to her husband's and he's not able to make any claim to her assets. That's very important.
The second reason is if one of the spouses passes away during the marriage, they probably want to make sure that their assets go to their children right? Now, we can still make provisions that their husband or the wife, the other partner or life partner can still enjoy the benefits of that trust. If they want to, it's entirely up to them.
Once the surviving spouse or life partner passes away then that partners, children get everything. So in other words, once both spouses have passed away, all of the husband's assets go to his kids and all of the wife's assets go to her kids. And that's really important because if you guys are young or even if you're older, and one of the spouses passes away and you give everything to the other spouse, well then what happens if that surviving spouse gets remarried?
Because you've just given all of your assets to that surviving spouse, and then they get remarried to somebody else and then your surviving spouse passes away. So some third party that you'd never even met or even thought about now has all of your assets leaving your kids completely out in the cold.
Very important, if you're starting a blended family whether it's second, third, whatever it is, marriage then you want to make sure that you have your estate plan in place before you tie the knot. And before you say I do.
I know I've thrown a lot at you today. So that's why we've prepared our free guide on estate planning. I'll put a link to it in the description below and in the comment section below that. So that you can download it and get started in the right direction and to help you out even more. Watch this video up here and this video up here. If you enjoy this video then it guys please smash that subscribe button and click on the like button and also click on that little bell. So you'll get notified every time we post a new video have a great day and an awesome week. And as always, thanks for watching.