Getting married after being divorced or widowed offers people an opportunity for a positive family life. However, people considering a second or subsequent marriage should evaluate their current and future financial affairs carefully before walking down the aisle.
In situations where one or both spouses bring children from prior marriages or relationships into a new marriage, concerns about future inheritances may naturally arise.
Blended families, competing interests
As explained by Forbes, a blended family comes with its own natural set of potentially competing interests. A new spouse may expect to be financially cared for should their partner die before them. At the same time, the deceased spouse’s children may expect to inherit certain assets upon their parent’s death. This situation may create a significant challenge for a person who wants to cater to both their new spouse and their children or even their grandchildren.
Estate planning for different interests
Each spouse in a remarriage may evaluate their individual assets and choose how to direct those after they die. According to Policy Genius, a qualified terminable interest property trust may provide a person the opportunity to both provide for their surviving spouse and for their children, grandchildren or other heirs.
The QTIP trust allows assets to be titled under the trust and then directs an income to the surviving spouse based on the trust asset value without taking anything away from the actual trust assets. The primary assets in the trust remain protected and flow to the decedent’s children after the surviving spouse passes away.
Beneficiary designations from assets like life insurance policies or retirement accounts may also factor into a remarried person’s ability to address the needs of their spouse and their children.