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Second Marriage


Importance of Estate Planning with a Second Marriage


A Second Marriage can be an exciting time and a new chance at happiness. If you are planning to take another walk down the aisle, it is critical to take the time to review and revise your Estate Plan, especially if meaningful assets and debts are being brought into the marriage. The ideal time to look at your Estate Plan should occur before your second marriage to prevent the unexpected to happen and to minimize inheritance disputes. Although we often see that the building of trust between the newly married couple and a thorough understanding of each party’s family ties and interests often takes time.  Many times, a couple can get married for a second time with no grandchildren in the picture. A decade later the number of interested parties expands significantly along with the complications of trying to be generous and fair.
Both you and your new spouse need to begin with an inventory of your assets and debts. List all of your financial-related accounts like investments, savings and checking accounts. Real estate and any other personal assets need to be inventoried, as well. Thus, it is critical to review your Will, Trusts, health care plans and directives, Powers of Attorney for Property and Personal Care and other Estate planning documents. This sounds a little overwhelming and many of us do not have these documents well organized. The key documents are Powers of Attorney as these are important while you are alive and your Wills.  Also important are the financial tools that can avoid Probate like RRSPs, Insurance products and TFSAs. In these documents, you must ideally have a primary and secondary beneficiary.  This is key to your money not being taxed in your Estate and does provide funds for your family that go directly to Beneficiaries without any holdup should you pass suddenly.

Estate Planning efforts with children involved.

Children add a wrinkle to your Estate Planning efforts when you are getting remarried. When there are children in the picture, decisions need to be made as to whether certain assets should be left to your children or perhaps, your new spouse may want your assets to be equally distributed among his or her children as well as yours.
You should update your Will to ensure that your spouse and their children receive the share of your assets you wish them to have while still preserving your children’s inheritance. It is important to consider the age of your children when deciding what is fair in a second marriage and Estate Planning. For example, there may be questions over who would assume control over assets on behalf of minor children should one of you die. Provisions may also need to be made for any children you plan to have in your second marriage.

Importance of updating your Beneficiary designations

Naming Beneficiaries is a difficult decision in second marriages. While often easy to do with the first marriage, the second marriage can bring the possibility of children or others being bypassed in the process. Remember a new spouse will have the ability to name anyone they please as a new Beneficiary. Even if promises are made along the way those promises can be broken after one spouse is deceased, leading to tremendous discord and legal matters.
Keep in mind that if you have named any minor children from your previous marriage as beneficiaries and you unexpectedly die, your former spouse will likely become their legal guardian and gain control over their property. Consider designating a trust as a Beneficiary for your child’s benefit to avoid this situation.

Naming Beneficiaries

Review all of your Beneficiary designations to verify whether your former spouse is still named as a Beneficiary of any life insurance policies or retirement plans. Do not forget about your benefits at your place of employment, such as group life insurance accounts when reconsidering beneficiaries.
When naming new Beneficiaries, be aware that your new spouse may have mandatory rights to certain assets, such as qualified retirement plans. Even if someone else is named as a Beneficiary, such as a child from your previous marriage, you will have to ask your new spouse to waive these rights in writing. When you die, the courts will automatically assign your qualified retirement plan assets to your spouse even though children from your previous marriage are named Beneficiaries of your qualified retirement benefits. This could happen if you do not get consent to waive these benefits from your new spouse.

The Bottom Line

Because Estate Planning in a second marriage can be tricky, it is important to get the conversation started early with your new spouse. Discuss your goals openly with each other and consider hiring a skilled Estate Planning lawyer to help work out any inequitable issues. By working with your lawyer and discussing your goals with one another, most if not all potential Estate Planning issues can be worked out to everyone’s satisfaction.


Read about the Importance of Naming an Executor

Want more information?

Are you interested in a consultation with Peter R. Welsh?
Contact me at Peter@SmartWills.ca
By telephone 416-526-3121
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This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.