One of the primary reasons most people create an estate plan is to ensure that the assets they acquire over a lifetime are distributed according to their wishes after their death. If that is one of your primary concerns, and you are married, you likely plan to give the majority of your assets to your spouse. What happens to those assets, however, if your spouse remarries after you are gone? It is one of those things that not everyone talks about given the emotional aspect of the subject matter. Nevertheless, planning for the possibility that your spouse will remarry in your estate plan is a wise choice.
Have You Discussed the Possibility?
Understandably, many people prefer not to spend much time discussing the inevitability of their own death. Discussing what might happen after your own death with your spouse can be an even more difficult conversation. Some people are adamant that their spouse actively search for love again if something happens to them while others cannot even consider the thought of their spouse falling in love again. There certainly is no right or wrong way to look at the possibility of finding love again after the death of a spouse; however, from a legal standpoint, it is a good idea to consider the possibility that your spouse might marry again after you are gone.
Why Does It Matter If My Spouse Remarries?
The emotional impact of your spouse remarrying aside, why does it matter if he/she remarries once you are gone? From a practical and/or legal standpoint, it can matter because it puts any assets you left to your spouse at risk. For example, assume that you gifted the majority of your estate assets to your spouse upon your death with the understanding that your spouse would then pass them down to your children upon his/her death. Once your spouse remarries though, those assets could become part of the new marital estate, subjecting them to division in the event of a divorce or to intestate succession laws in the event of death. Either way, your assets could wind up in the hands of your surviving spouse’s new spouse. Your spouse might fully intend to pass down the assets to your children; however, if they are unintentionally co-mingled or if your spouse dies intestate (without a Will), those intentions might not matter.
How Can You Protect Your Assets?
Fortunately, a well thought out estate plan can go a long way toward preventing the loss of your assets, even if your spouse does remarry after you are gone. One estate planning tool that can help is a Qualified Terminable Interest Property trust, or QTIP. A QTIP trust operates in basically the same way as any other trust with some special terms designed to provide for your spouse while protecting your children’s inheritance. You will need to appoint a Trustee to oversee the administration of the trust and manage the trust assets. Assets transferred into the QTIP trust are not actually gifted to your current spouse when you die. Instead, your spouse receives income from the trust assets but cannot withdraw the principal from the trust nor can he or she decide on the ultimate disposition of the trust assets. In the case of real property, your surviving spouse may also receive a “life estate” in the property, meaning that he or she may remain in the home until death, but will never own the property outright. When your surviving spouse dies all assets held in the trust are then transferred to the intended QTIP trust beneficiaries, in this case, your children. Because the assets held in the trust are never legally owned by your spouse, they cannot be part of the division of property in the event of a divorce. In other words, QTIP assets will not be considered marital property and subject to a divorce property settlement agreement. Talk to your estate planning attorney about creating a QTIP or about other estate planning tools and strategies that can help protect your assets in the event your spouse remarries after your death.
Contact Overland Park Estate Planning Attorneys
For additional information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to protect your assets from your spouse’s remarriage, contact the experienced Overland Park estate planning attorneys at Parman & Easterday by calling 913-385-9400 or 405-843-6100 to schedule your appointment today.