How Can Remarriage Affect Your Estate Planning?

Divorce and remarriage are more common now than in the past. If you or someone named in your estate planning documents has remarried, there are several major issues that you should be aware of and some steps you should take to ensure your estate planning continues to be appropriate for your current situation.

What If You Do Nothing?

The laws of Michigan, like many other states, assume that a divorced spouse does not want their former spouse to inherit anything from them. So even if a will, a trust, or a life insurance policy names a former spouse as a beneficiary, Michigan law revokes that disposition or appointment, as well as those to relatives of the divorced individual’s former spouse. Michigan law also revokes the appointment of the divorced spouse as a fiduciary, for example as trustee of a trust or agent in a power of attorney.

But be careful! This is not true in all states. So it is important to review your trust, will, power of attorney, as well as beneficiary designations for your life insurance policies and retirement accounts, to ensure that your planning reflects your current wishes. If you no longer wish that an ex-spouse be named as a beneficiary (unless the terms of your divorce settlement require it), clearly state that intent in your estate plan. In addition, if you still want your former spouse to benefit from your estate in any way, speak to an attorney to ensure that your objectives will be met even if your state has a statute that would prevent it. It is also wise to review your divorce decree to check whether it contains a court order to retain an ex-spouse or minor children as named beneficiaries on a life insurance policy insuring your life.

Just as important, if you want your current spouse to be the beneficiary of your estate planning or insurance policies and retirement accounts, you should update those beneficiary designations. On the other hand, if you wish to designate other family members instead of your current spouse as beneficiaries, you need to update your beneficiary designations in your estate documents and financial records accordingly.

Likewise, if you are still assuming that you will inherit or be entitled to some money and property or benefits from a former spouse, determine whether those assumptions remain true. Often, remarriage will impact your ability to qualify for certain government and pension benefits such as Veteran’s Administration benefits, Social Security benefits, or even survivor’s pension benefits from a deceased spouse’s employer. If those assumptions are no longer accurate, be sure to take that into consideration when updating your estate planning documents.

What About Your Current Spouse?

Your estate planning should be reviewed and updated to reflect your current wishes. If you and your current spouse entered the marriage with your own assets that you intend to keep as your own so that those assets will pass directly to your children, grandchildren, or others, your estate planning must carefully address this desire. In Michigan, and many other states, there are default laws to ensure that a surviving spouse is not completely disinherited. These laws of intestacy or elective share (and in some states community property laws) can significantly disrupt even the most carefully drafted wills and trusts. Without a pre- or postnuptial agreement in place in which both of you agree how property should be distributed upon the death of one or both of you, your efforts to leave your property to someone other than your current spouse may be seriously frustrated.

On the other hand, if you do want to ensure that your surviving spouse receives some (or even all) of your property, it is equally important that your estate planning documents clearly communicate your intent. This careful effort can help make your intentions clear, and help preserve a good relationship between your children from a former marriage and your new spouse. When children understand what your intentions are and why you are dividing property in a particular way, their assumptions about what their stepparent is receiving, for example, the family home, can be corrected. 

When Beneficiaries and Fiduciaries Remarry

Remarriage can disrupt your estate planning even when you are not the one who remarries. Sometimes, a beneficiary remarries after you have named them in your legal documents. If the new marriage is rocky because the new spouse is financially unstable, at risk for lawsuits, or the marriage appears unlikely to last for very long, it may be time to review the provisions of your estate planning. In such a case, you may want to specify that any inheritance that passes to your beneficiary alone must be held in an ongoing asset protection trust for their benefit. Such language can prevent the inheritance you leave the beneficiary from being attached by their spouse’s creditors or even from being divided as marital property in the event of a divorce.

Another issue can arise if you have named a married couple as guardians for your minor children if something happens to you. If the couple divorces, does your estate plan clearly show what your wishes are then? Can one of the divorced couple act alone as guardian? If so, which one? If you desire that your children be cared for by a couple, does your estate plan clearly show that? You should review your plan to make sure that it clearly shows your deisres.

If a married couple is named as beneficiaries of your will or trust, does your plan show what you wish to happen if they were to divorce? Are both still intended to be beneficiaries? Is only one the intended beneficiary? Is the new spouse to be included? Your estate plan needs to be clear and must clarify what you want to happen in such circumstances.

We Can Help

We are here to help make sure that your estate plan is up to date and reflects your current situation and intent. If you need help thinking through these various considerations for your own circumstances, please contact us. We have the expertise and experience to help ensure that your estate plan will work for you and your family exactly as you intend.