We hope you all know that parents are not required to leave their children an inheritance. Doing so, however, is a common goal and can be an integral part of family connections across generations. Our desire to pass on wealth, family treasures, and the property is the reason estate planning exists. When parents divorce, it is important to consider the changed spousal relationship while understanding that both parents (generally) maintain relationships with their children. As such, divorced parents should consider these intentional steps to take to prevent children from being unintentionally disinherited.
First, remember that Nevada is a Community Property state. This means income earned, and property acquired, by either spouse during the marriage belongs to both equally and would be split equally in the event of a divorce. Thus, if you remarry, you and your new spouse should define how you will treat income and assets in the marriage through a pre- or post-nuptial agreement.
Next, you and your new spouse should decide how your estate will be handled after one of you passes away. Instead of relying on a surviving spouse to “do the right thing,” we suggest you and your spouse plan the right thing for your family and execute estate planning documents to make sure those plans become reality.
This often includes preparing a “family trust.” A properly designed trust can hold a portion of marital assets after the first spouse passes away, allowing that portion of your estate to be set aside for “your” children (as opposed to your spouse’s children, or other beneficiaries). This is a way to ensure your children will receive at least the designated portion of your estate.
It is usually also wise to hold property in a trust. The trust can allow your surviving spouse to live in a primary residence for his/her lifetime. Then, that property can be sold, and its value divided among designated beneficiaries. Vacation properties can also be held in trust, then sold or inherited, according to your wishes. Using a trust in this manner means decisions made during your lifetime will be carried out after you pass away, eliminating the chance for a surviving spouse to change the plan.
You should also take a close look at your retirement accounts, life insurance policies, and other assets controlled by beneficiary designations. Whoever is the named beneficiary will receive the asset with no obligation to share its value. Under federal laws controlling 401K and similar pension accounts, your spouse is automatically the beneficiary unless he or she signs a waiver and you name someone else to inherit (your children or a trust, for example).
While estate planning for a second marriage can be a delicate balance of goals, not planning creates risks for both the surviving spouse and children from prior marriages. At Kling Law Offices, we offer a free consultation to discuss the tools available for helping balance these interests. Our goal is to help you achieve the peace of mind you deserve, so contact us today for an appointment.