Hiding all the facts

According to an article by desmoinesregister.com, the first step when estate planning for a second or third marriage is to open up the lines of communication. Experts say money is a major cause of stress as well as divorce. Start a marriage off right with full disclosure about estate planning, assets and your intentions.

Failing to update a will

A common mistake people make when remarrying is to not update the will. You should know if you are marrying a person who doesn’t have a will. Before you get married, consult with an elder law attorney. After you marry, go together with your spouse to update legal papers and beneficiaries as it relates to your assets.

Neglecting to ask questions

Another mistake people make when they remarry is assuming they understand a spouse’s will. Because legal language is often complicated, don’t be afraid to ask your elder law about language that seems ambiguous. If you have a blended family, you need to stipulate whether money will be left to your children, your step children, step children from a previous marriage or a combination.

Letting your spouse decide

Instead of letting one spouse make all the estate planning decisions, work as a team. One option to consider is a qualified terminable interest property trust which will allow your new spouse to live off your assets and stay in your house while still leaving an inheritance in tact for the children from a prior marriage. According to the desmoinesregister.com, a QTIP trust provides for your children from a previous marriage because it preserves the principal for the children. What’s more, the assets that go to a QTIP trust qualify for marital deduction so it reduces the estate taxes at your death.

Ignoring the wealth disparity

An elder law attorney in Michigan can also help you when one spouse is wealthier than the other spouse. When you even things out, it’s likely you can take advantage of important tax savings if the less wealthy spouse passes away first. Talking about estate planning is a sensitive topic for many couples, but it’s imperative to prepare.

If you decide you want a prenuptial before marriage or a post-nuptial agreement after marriage, talk to your elder law attorney. It’s important to understand the rights and responsibilities of marriage and what will happen if you divorce. Elder law attorney Christopher J. Berry and the Elder Care Team will work hard to review and adjust your beneficiaries to ensure your assets go to the heirs you want. You need a retirement plan trust that recognizes your special needs as a blended family. Christopher J. Berry will protect you with a Michigan Retirement Plan Trust that considers income tax and required minimum distributions ramifications. For more tips on estate planning for a second marriage, please contact us.

The post Estate Planning Mistakes to Avoid When Remarrying appeared first on Estate Planning Lawyers | Elder Law Attorneys | Brighton | Novi | Livonia Elder Law Attorneys.

The “qualified terminable interest property trust” is very often used for those who are remarried with children from a previous relationship.  The overall goal of this kind of trust is to provide for the current spouse while considering the needs of the children from an earlier relationship.  As an added bonus, a QTIP Trust can also help to limit some tax burden.

How It Works – The Simple Version

In most cases, a person’s estate passes directly to his or her surviving spouse.  In “traditional” families, this can be a great situation.  However, in blended families, it is possible that the new spouse could very easily (and legally) spend all of that money without any of it going to the deceased’s children from a previous relationship.  To add insult to injury, if that surviving spouse were to then pass away, the estate would then go to his or her biological children, leaving the other kids completely out in the cold.

A QTIP Trust takes advantage of the marital exemption by putting the assets into a trust and having the income from that trust designated for the spouse.  However, once that spouse passes away, the assets within the trust then become the property of the children.  When all is said and done, the decedent has been able to care for both the spouse and the children, all while limiting the tax burden for both.  For these reasons, trust attorneys in Troy have found this to be a very useful tool in many situations.

Not Just for Those Who Remarry

While a QTIP is often used for those who have remarried, there are some good arguments to be made for its use with “intact” families.  In this case, “intact” refers to those where the parents are still married to one another, and there are no children from other relationships.  In these cases, a trust lawyer in Troy might still suggested a QTIP as a way to defer tax costs when they might create an undue burden for the surviving spouse.  Taxes would still need to be paid once the second spouse passes away and would be the responsibility of the children who inherited the assets from the trust.

This type of set up can also help to protect the surviving spouse and his or her children from those who would prey on them.  Unscrupulous individuals who would marry for money would be deterred by the knowledge that they would never be able to inherit the assets that were a part of the trust.  Your trust lawyer in Troy can discuss the dangers of these types of predators and work with couples to protect against a situation where a grieving spouse is taken advantage of to the detriment of everyone involved.

Christopher J. Berry is a Michigan estate planning attorney and Medicaid planning lawyer dedicated to helping seniors, veterans and their families navigate the long-term care maze. To learn more visit http://www.michiganelderlawattorney.com/ or call 248.481.4000