Remarriage is a wonderful second chance at happiness. While it does come with unique challenges of merging families and separate assets, an estate plan can help make sure financial goals are realized and that dependent children are cared for. A new estate plan should reflect the goals of the new couple, as well as take into account the new family structure, which may include children from a previous marriage.
Why is this important? Let’s discuss what happens in Colorado if you pass away without an updated will, as well as discuss some common issues blended families face when a proper estate plan isn’t in place.
Dangers of not having and updated will
In the state of Colorado, the law states that unless otherwise specified in a last will and testament, the inheritance of a married person (including common law marriages) goes to the surviving spouse. In remarriages, specifically those with blended families, this scenario is wrought with potential problems.
Leaving your spouse to take care of inheritance. Without a will to specify who gets what, the surviving spouse could favor their own children over nonbiological children. They could choose to gift away assets outside of the family. They could run into problems with creditors and debtors who liquidate assets to pay off debt. They could remarry and accidentally disinherit the children from the previous marriage – meaning your assets would go to your spouse’s new partner and not to your children.
The above scenarios aren’t meant to instill distrust of one’s spouse. Instead they are intended as an acknowledgement of the uncertainties of the future. And if you have certain wishes in regard to your estate, then don’t leave your spouse guessing, put it down in writing. When thinking about how best to tackle your new estate plan, ask yourself questions like:
- What happens to my separate and commingled assets should I die and my spouse remarries?
- How do I want to divide my assets between biological and nonbiological children?
- Do I want my children to wait until both my spouse and I die to inherit?
- Who will inherit my house – my spouse or children?
The pains of probate. Without an updated estate plan, when you die, your assets will go through probate, whereby a court will disburse your assets according to Colorado law. This process can emotionally taxing for your surviving family members, as it can be a lengthy and expensive process. For those wishing to avoid this, they can update their estate plan to include a trust.
A revocable trust allows you to avoid probate, keep your finances off the public record and protect your wishes from contentious family members. A trust is also a good option for:
- Minimizing inheritance taxes (for larger estates worth $5 million or more).
- Caring for disabled or special needs dependants.
- Safekeeping inheritances until dependants come of age. Or conversely;
- Allowing family members immediate access to inheritances by bypassing the probate process.
Reviewing your guardianship plan
In the event of your death, your children will go to the other biological parent; if you’re remarried, that means your ex-spouse. If, for whatever reason, you believe that your ex-spouse should not get sole custody of the children, then you can state so in your will. A court will usually favor keeping a child with the biological parent, so you will need to collect evidence that shows why your ex-spouse is unfit, to persuade the court to accept other arrangements. Evidence such as police reports or other court records are a good place to start.
If you have children with your current spouse, you may want to also consider appointing a guardian should you and your spouse pass away unexpectedly. Things to consider when selecting a guardian are – how far away do they live from your children’s school and other family members? Do they have a spouse and would that spouse be supportive? Is this person financially able and mature enough to care for your children? To read more about guardianships, please read our blog post here.
To get the ball rolling on developing a new estate plan, a couple can start by:
- Taking an inventory of all marital and separate assets.
- Having a frank discussion with one another on goals and wishes.
- Taking into consideration the feelings of immediate family members.
- Meeting with your estate planning attorney to update all documents and beneficiaries.
Call our estate planning attorneys for a free consultation. They can review your estate and help you decide if your family would best be served by a trust, will and/or a power of attorney.
If you enjoyed reading this blog about remarriages and blended families, you may also like to read our blog on marital agreements, which are an important component to safeguard any marriage.