Since so many people procrastinate for years before they address the matter of estate planning, after they take action, inertia can set in once again. If you are in this category, life changes will probably come down the pike. As a result, your estate plan may become obsolete, and this is something that you should understand from the start.
Indeed, estate planning should be viewed as a process, not a one-time event. You can always make sure that your estate plan reflects your current desires if you schedule a consultation with our firm every couple of years so that we can review your documents with you.
Sometimes adjustments can be necessary because of something that is out of your control like a change in some relevant law or laws. In other cases, the need for an adjustment will be obvious because of a major life event like a change in marital status.
Beneficiary Designations
If you are getting married or divorced, you should definitely come into the office so that we can revise your estate plan to suit your new situation going forward. Part of the plan will usually be a change in the beneficiary designations for life insurance policies and accounts that may have a named beneficiary.
Your incapacity planning component should also be adjusted if you want to change the agents for your powers of attorney. When you make the appropriate adjustments in a timely manner, you can go forward with total peace of mind because you never know what the future holds.
Protecting Yourself and Your Children After Remarriage
There are some serious estate planning implications that you will invariably have to address if you get remarried after having children from a previous marriage. This is especially relevant if you are financially successful and there is a strong likelihood that you will predecease your new spouse.
Under these circumstances, you could consider entering into a prenuptial agreement. It is important to understand that many second and third marriages fail to withstand the test of time. Granted, you would not be getting married if you do not expect it to last, but in this case, the statistics don’t lie.
Another thing to consider when you are getting remarried is the security of the inheritances that you would like to leave behind to your children. There is an estate planning tool that can provide for your new spouse while you simultaneously make sure that your children can never be disinherited.
The device that we are referring to is the qualified terminable interest property (QTIP) trust. To explain, we will use a simple example. Let’s say that you have two adult children, and you are getting married to someone who is 20 years your junior. You could make your spouse the first beneficiary of this type of trust, and your children would be the final beneficiaries.
If you do predecease your spouse, the trustee you name in the declaration would be able to distribute the earnings from the trust to your spouse throughout the rest of his or her life. Your surviving spouse would also be able to use property that has been conveyed into the trust. This arrangement is similar to a “life estate.”
Clearly, you would be fulfilling your responsibility to your spouse, but they would not have the ability to change the beneficiary designations. After the surviving spouse passes, your children would become the owners of all assets that remain in the qualified terminable interest property trust.
Schedule an Estate Planning Consultation Right Now!
Our doors are wide open if you have not looked at your existing estate plan in years, or if you know that you need an estate plan update. Of course, if you are going through life with no estate plan at all, action is required sooner rather than later.
You can send us a message through our contact page to request a consultation appointment, and we can be reached by phone at 606-324-5516 in Ashland, Kentucky, 859-372-6655 in Florence, Kentucky, and 704-944-3245 in North Carolina (Charlotte, NC and Huntersville, NC).
John’s practice focuses on the use of Wills and Living Trusts in Estate Planning to help individuals protect their families and preserve their legacies after their deaths, but his practice also focuses on the critical issues of protecting individuals with dementia or other diminished capacity, assisting individuals in qualifying for Medicaid and other government benefits to offset the costs of long-term care, and providing special needs planning.
John is admitted to practice law in North Carolina, South Carolina, Kentucky, and Ohio, and he is accredited by the Department of Veterans Affairs.
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