Second Marriage and Estate Planning
April 7, 2023
If you’re in your second marriage, or about to enter into one, your estate planning can get more complicated, especially if there are children from the previous marriage and stepchildren or new children from your second marriage. The best approach is to iron out everything with your intended spouse before marriage and then create a prenuptial agreement.
However, if you’re already on your second marriage without such an agreement, then you will have to create the legal instruments necessary—or revise whatever you have, a will, living trust, powers of attorney—to account for your new reality.
It can get a bit tricky, and a lot of people’s feelings and emotions may complicate matters. Children from the previous marriage and stepchildren or new children from your second marriage will all feel entitled to being taken care of in your estate planning.
For all your estate planning questions and concerns in or around Cathedral City, California, contact the Law Office of Robert L. Firth. We will meet with you, discuss your situation, and advise you of your best options going forward to care for all your loved ones. Your first consultation is free, so reach out immediately. We proudly assist clients in the Coachella Valley, Palm Springs, Palm Desert, Desert Hot Springs, Rancho Mirage, Yucca Valley, 29 Palms, Blythe, El Centro, Menifee, and Riverside.
Rights of a Surviving Spouse
California, of course, is a community property state, so any assets acquired in either spouse’s name during the time of marriage belongs equally to both. This can include retirement savings in 401(k)s and other similar instruments. What you owned prior to your (second) marriage is considered personal property, as are any gifts or inheritances you receive during your marriage.
When you die, your spouse will be entitled to everything that was acquired during the time together as a married couple. Not all assets, however, are subject to designation through a will or living trust. Real property held in joint tenancy passes directly to the co-tenant, which, in this case, may be your spouse. If you’ve named beneficiaries for your life insurance or retirement accounts, those assets also pass outside of the probate system and outside of trust administration.
Who is entitled to what can get a bit tricky under California’s intestate succession laws. If you have one child and a spouse, when you die, the spouse is entitled to all of the community property and half of your personal property. The child is entitled to the rest. If you have a spouse and two or more children, the spouse is entitled to all of the community property and one-third of your separate property. The children are entitled to two-thirds of your personal property.
Intestate, of course, refers to a person dying without a will, but the statutes covering intestate succession provide guidelines for how your community property and personal assets should be allocated in your estate plan.
Factors in Estate Planning for a Second Marriage
If you are remarrying or have remarried, the first obligation is to revisit any beneficiary designations for retirement or other accounts and also in any will or trust you have. Wills and trusts can be voided and rewritten. You don’t want your ex-spouse to stand in line to inherit your retirement account because you forgot to update the beneficiary; likewise, if your EX is still the primary beneficiary in your will or trust.
The best approach to a second marriage is to negotiate a prenuptial agreement.
As for children from your first marriage, you can always give them assets or even cash before remarrying. In 2023, you can give anyone $17,000 as a gift, and it will be treated as tax-free by the IRS. You can also just transfer other assets to your children—give one a car, another your art collection, but there could be tax consequences. You could also set up funded trusts for your children from the first marriage. It all depends on what your assets are.
Another important tactic pre-second-marriage is to place all your personal property into trusts to avoid commingling those assets. Say you own a rental unit as your personal property. When you remarry, if your new spouse helps at all in maintaining that property, your spouse can become entitled to a share of its value, which is called becoming a “commingled” asset. Use the trust to manage the property to avoid commingling.
However, if you didn’t plan ahead and just “rushed” into your second marriage, then it becomes a bit more challenging, especially if you have children or stepchildren from both marriages. The children will all be looking to you to provide for them when you’re gone. Your spouse will be entitled to the community property and even some of your personal property. You will have to walk a fine line to make everyone happy. Getting the support of an estate planning attorney can help you find solid outcomes.
In a will or trust, of course, you can exclude children as beneficiaries, but you need to work with an experienced estate planning attorney to dot all the legal I’s and cross the legal T’s. If you just leave a child out of your will or trust, California law assumes that was an error, so that person may still be entitled to a share. You must specifically cite that the child should be excluded. Due to California’s community property statute, however, you cannot exclude a spouse.
Rely on Dependable Legal Advice
Second marriages can pose significant challenges when it comes to estate planning, especially if there are children and stepchildren involved in each marriage. The best option is to plan ahead and create a prenuptial agreement and transfer assets into trusts before marriage. Review all your assets and legal documents before taking the vow again.
For all your estate planning questions and concerns in or around the Coachella Valley, contact the Law Office of Robert L. Firth. Reach out immediately for a free consultation.