Did you know that individuals who get divorced are more likely to remarry? In fact, 57-63% of divorcees remarry, forming blended families where one or both parties may have children.
Unfortunately, many of these individuals fail to update their estate plans after they get married. This can lead to probate litigation. This is what you should know.
If you and your first spouse have children and after your spouse passes away, you get remarried and then pass away, your children from your first marriage may receive none of your assets. They may then pursue litigation to get an inheritance. In addition, if you divorce your first spouse, whom you had children with, and you remarry and receive an inheritance, this money can become community property, and upon your death, all of this inheritance transfers to your current spouse, leaving your children without an inheritance and encouraging litigation. Your current spouse could also sue if left with nothing in your estate or will.
To prevent or reduce probate litigation, do not comingle inherited funds with your second spouse. Instead, set these funds aside in a separate account and designate beneficiaries. Although your 401(k) account automatically goes to your spouse, you can designate beneficiaries for your other investment assets or add the beneficiaries’ names to your accounts.
Inventory all your assets and debts prior to getting married and determine who you want to get what. Create a detailed estate plan and share it with your new spouse and children. Work with your spouse on the distribution of your marital assets. Look into remarriage protections, such as a trust, to protect your assets and their distribution.
To prevent future probate litigation, update your estate plan after any major life changes, including marriages and divorces.