The decision to remarry can be complicated for the widowed or divorced. Some people back away from remarriage when they realize the difficulties of merging a lifetime of financial decisions, particularly because they do not want to compromise their children’s inheritance.
Those contemplating a second marriage should consider a few steps in marriage planning.
Discuss intentions and decisions. Discussing inheritances, even in the best of situations, can be a sensitive topic, but clearing the air while of a sound mind minimizes “the after-death fiasco” that ensues from heirs and beneficiaries who feel wronged or overlooked. Estates never bring out the best in people.
Make it legal. Estate planning documents are absolutely critical for those on their second marriage, particularly when children are involved. Married couples must address their estate planning decisions using legal tools, such as a will, trust, and beneficiary designations, particularly if the remarriage creates a blended family.
Consider gifting. Gifting provides a viable option to give adult children part of the estate while the donor is still alive. The annual gift tax exclusion of $14,000 ($28,000 for joint filers) per individual, permits the transfer of a substantial amount of assets during the lifetime of the donor. A tax professional can determine the most tax efficient investments and timing to transfer assets.
Second marriages, like any other, come with challenges. Nevertheless, with proper estate planning, people planning a second trip to the altar can reduce the financial stress associated with the death of either spouse or divorce.