When you navigate your way through a divorce, you will typically find that your life, as you know it, will undergo considerable change. While divorcing has numerous estate planning and tax implications, so, too, does marrying for a second time. When your marital status changes, so, too, do your estate planning needs. People marrying for a second time often face unique hurdles with regard to the estate planning process that those in first marriages may not.
When you and your new spouse-to-be discuss your estate planning objectives, it is critical that you maintain open and honest communications while doing so. Exercising full disclosure early on can potentially prevent considerable hardship or family strife later on, so the more you can sort out before you say, “I do,” the better. So, what types of estate planning matters might you want to reevaluate once you see a second marriage on the horizon?
Any existing divorce agreements in place
If you have financial or other obligations you must adhere to from your first marriage, make sure your new partner is well aware of them and their terms. If, for example, your former spouse will get a substantial portion of, say, your retirement benefits, your new spouse needs to be aware of this.
Long-term goals and objectives
This is also a good time to sit down with your spouse-to-be so you can discuss how you plan to distribute your wealth or assets among your new family members. You may, for example, want to determine what you plan to leave behind for your own children, your stepchildren and so on.
Tax implications
When you divorce or remarry, it will undoubtedly impact the manner in which you file your taxes. Your actions may have considerable tax consequences, so the more you know about what to expect, tax-wise, the less likely you are to receive an unpleasant surprise.
It is smart to revise and update your estate plan periodically, regardless of your marital status. However, you may find it particularly advantageous to do so as you enter into a second marriage.