This is also knows as Planning for Three Families. If you or your spouse have children from a previous marriage then the planning process necessarily becomes riskier and more complex.
The main problem is that if you died leaving everything to your new spouse and then your spouse died, then your children would inherit nothing. Everything would be inherited by the children of the second spouse to die.
If instead you decide to leave your assets directly to your own children then this could adversely effect the financial security of your spouse.
Planning for those who are remarried generally fall into two broad categories:
1. Each spouse comes into the second marriage with significant assets such that the financial security of the spouse who will survive is not an issue. You can leave all of your wealth to your own children without endangering your new spouse’s financial security. There may be special problems relative to estate taxes by planning in this way, but the personal financial security and the general distribution pattern is easily provided for.
2. The more common situation is that the surviving spouse will need the use and enjoyment of the deceased spouse’s assets in order to secure lifestyle and standard of living. Now we have three families to take care of in our planning–the surviving spouse, the children of the deceased spouse, and the children of the surviving spouse. How do we provide for the surviving spouse and still make sure the children from both sides will receive their fair share on the second death?
These are the issues we deal with every day in the process of consulting with our clients who are in second marriages.
Call 847-250-0435 for a free consultation