Many in Massachusetts know that getting married for a second time comes with its own set of challenges, including when it comes to estate planning. Asset protection in a second marriage is often a delicate balance between taking care of a new spouse and providing an inheritance for children of a prior marriage. Nevertheless, it is far from an impossible task.
When it comes to something like the family home, it is not necessary to leave a second spouse homeless while the children inherit the house. Granting a new spouse a life estate in the property will allow a surviving spouse to use and enjoy the property for the remainder of his or her life. Upkeep and other financial obligations of the home can be made be the responsibility of the spouse living in it. The only caveat, however, is that the surviving partner may not sell the home without the consent of the deceased spouse’s children. Upon the death of the spouse living in the home, the children inherit the property under this scenario.
A multitude of estate planning tools can preserve assets for children to inherit. Beneficiary designations on items such as life insurance policies and retirement accounts and trusts that hold certain property on behalf of the children are important options to consider. Assets may also be bequeathed through a last will and testament. Nevertheless, estate planning documents need to be drafted and executed in accordance with Massachusetts law in order to be considered valid.
Gifting is yet another way to get assets to children during a person’s lifetime. Currently, an individual can gift up to $14,000 per year to another individual before it is taxed. However, it may be a good idea to explore any possible tax issues before determining whether gifting is appropriate.
Some or all of these tools may be used for asset protection. Having an estate plan can put everyone’s mind at ease. A new spouse can be provided for while ensuring children, and even grandchildren, inherit assets in accordance with a party’s wishes.
Source: thestate.com, Second marriages come with financial concerns, Ashleigh Brooker, Dec. 22, 2013