There are some complicated situations that can exist from an inheritance planning perspective when you are a parent who is getting remarried. The exact dynamic will vary depending on the circumstances and the ages of the people who are involved.
When you are getting remarried as an older, established person, you have to consider the interests of your children, and you may also want to protect yourself personally. No one expects to get divorced on their wedding day, but the truth is that the majority of second marriages fail, and third marriages fail with more frequency than second marriages. The odds are against you when you are getting remarried, so a premarital agreement could be used to protect the interests of both parties.
When it comes to the interests of your children, you could convey assets into a legal device called a qualified terminable interest property trust. This is a mouthful to say, so these trusts are often referred to as QTIP trusts.
You would make your spouse the first beneficiary of the qualified terminable interest property trust, and your children would be the final beneficiaries. In the trust declaration, you name a trustee to administer the trust after your passing.
If you do in fact predecease your spouse, he or she can continue to use property that was conveyed into the trust, but your surviving spouse would not have the power to sell the property. The trustee could also distribute the earnings from the trust to your surviving spouse on an ongoing basis throughout the rest of his or her life.
Because of the above arrangement, you can go forward with the knowledge that you fulfilled your responsibilities to your spouse. However, your surviving spouse would have no ability to change the final beneficiary designations. As a result, after his or her death, your children would assume ownership of anything that remains in the trust.
A QTIP trust can potentially provide you with a turnkey solution if you are getting remarried as a parent with children from a previous marriage or marriages.
Estate Planning for Blended Families
Without question, there are some inheritance planning challenges that can exist when families are blending. A qualified terminal interest property trust can be part of the solution in some cases, but there are multiple different strategies that can be implemented.
The best way to proceed is going to depend on the situation, and each family is unique. Personalized planning is important, and our firm can answer all of your questions and explain your options to you.
If you would like to take action, feel free to send us a message through the following link to schedule a no obligation case evaluation: Grand Forks ND Estate Planning Attorneys.