Unfortunately, a significant percentage of marriages do not withstand the test of time. There has always been a statistic floated suggesting that half of marriages end in divorce, but more recently, analysts are downsizing that figure a bit. Still, divorces are not uncommon, and it is true that most second and third marriages fail.
Estate planning should be viewed as an ongoing process. It is not something that you complete in one sitting, because your initial estate plan will be constructed based on your life situation at that particular moment in time. Things change over the years, and changes in marital status can enter the picture.
If you get divorced, you should sit down with your estate planning attorney to review your existing plan so that you can make the appropriate adjustments.
Remarriage as a Parent
Couples who get remarried after being divorced have to discuss their mutual estate planning goals. This requires honest communication, and the matter can be complicated when there are children from previous marriages involved.
The age of the people entering the marriage along with the age of the children would certainly be a big part of the equation. Of course, the financial position of each person would also be a factor that should be discussed.
Qualified Terminable Interest Property Trusts
There is an estate planning device that can be useful if you are a parent who is getting remarried. It would be possible to create and fund a qualified terminable interest property trust. Because of the wordy name, these trusts are often referred to as QTIP trusts.
When you create the trust declaration, you name a trustee to act as the trust administrator. You could name someone that you know personally, but you could choose to use a corporate trustee as an alternative. A trust company or the trust section of a bank could be engaged to handle the trust administration tasks.
With this type of trust, you can provide for your spouse if you pass away first, and you can also protect the interests of your children. Your spouse would be the first beneficiary, and he or she would receive income from the trust for the rest of his or her life.
The secondary beneficiaries would be your children. Your spouse would have no ability to change the beneficiary designations, and your spouse would not have access to the principal. After the death of your surviving spouse, your children would inherit the assets that remain in the trust.
If you would like to discuss your estate planning objectives with a licensed professional, our firm would be glad to help. We offer no obligation consultations, and you can contact us through this page to set up an appointment: Grand Forks ND Estate Planning Attorneys.