Getting remarried? Be sure to protect your children from your prior marriage

If you're remarrying later in life, you may gain more than a new spouse. You may also gain a new, bigger family: your spouse's children. You may have your own grown children, too. Hopefully, everyone will get along beautifully. But even under the best of circumstances, remarriage almost always presents unique estate planning concerns. Addressing those concerns wisely and proactively is essential to ensure that your new, bigger family continues to get along after you're gone.

If you're like most of my clients in these circumstances, you probably want to provide some security for your new spouse in the event you predecease him/her. At the same time, you probably want your own children - not your spouse's children -  to ultimately inherit your hard-earned assets. To achieve those goals and avoid family disputes, you must make thoughtful and precise legal plans. You can't be casual about this issue, because Florida certainly isn't casual about it: In the absence of a valid pre- or post-nuptial agreement, Florida law entitles your spouse to (1) a minimum of 30% of your assets (the "elective share"), and (2) a life estate in the homestead property, or a 50% ownership share in it.

As you look forward to this promising new chapter of life, you may be tempted to just leave everything to your new spouse. Perhaps he/she has promised to leave all the assets that originated with you, to your kids, you know your spouse is trustworthy, and you have complete confidence that the promise will be kept. But guess what: circumstances beyond your spouse's control may arise that may make it impossible for your spouse to fulfill that promise, notwithstanding his/her good intentions. Consider these possible scenarios that could arise if your new spouse outlives you:

• Your spouse may come under pressure from his/her children to keep your assets instead of pass them on to your children. Trust me when I say it happens, and frequently. I recently heard this story from one family: "Mrs. K" spent six years caring for her second husband who had Alzheimer's. After he passed away, her children told her she was "morally entitled" to keep everything he'd left her, given how selflessly she'd cared for him. They took it one step further, too:  Since they were caring for their mother in her own declining years, they felt the house should be left to them. After several years of resisting their pressure, she relented and modified her estate plan to pass her second husband's money, and house, to her own children.   

• Your new spouse is only human and presumably, a loving parent. Suppose one of his/her own children falls on hard times or becomes ill and needs money?  Your spouse might be hard-pressed to deny funds to that child - even if that includes funds that were promised to your kids. It doesn't matter if your spouse has a will saying certain assets go to your kids, because a will can be changed at any time, so long as the will-maker is competent. Besides, a will is a death instrument; it has no control over what your spouse can do with the money during his/her lifetime. This also goes for any assets on which you've made your spouse co-owner. There's nothing to prevent a surviving spouse from naming his/her own kids as co-owners or death beneficiaries. 

• Don't assume that if your new spouse outlives you, the balance of his/her years will be healthy ones. Your spouse could become mentally incompetent, and then any "promises" that have been made could become meaningless. Conceivably, your savings could be squandered with bad financial decision-making. And if your spouse's children get control of his/her assets through a durable power of attorney, they will be able to manage the assets, even spending assets that are payable on death to your children.

So, with all these possible twists and turns, what can you do to ensure your kids get their inheritance? There are several possible approaches:

• Create a trust that gives your spouse access to the interest from your estate, and to a portion of the principal under certain circumstances. Once your spouse dies, the principal then gets distributed to your own children. I caution against making your spouse and your own children co-trustees. An arrangement like that can be a tinderbox, providing fertile ground for serious friction between the parties. Instead, I recommend selecting an independent, third-party trustee.

• Enter into a pre-nuptial agreement, or if you've already married, a post-nuptial agreement in which both of you waive your right to an elective share and/or homestead rights. You can agree on what you must leave to each other, if anything. Otherwise, under Florida law, your spouse has the right to the homestead for the balance of his/her life (either to live in it or to rent it out), or to force the sale of the property and take one-half of the proceeds. If you want your children to inherit the house, this issue requires careful consideration.

• Depending on your financial condition and health, consider purchasing life insurance on your life, naming as beneficiary your spouse and/or your children from your first marriage, and leaving some of the proceeds to each. Another possibility if you purchase life insurance is to set up a trust for the insurance that will distribute a specific amount of your choice to your spouse for the balance of his/her life, with the remainder going to your children upon your spouse's death.

The takeaway: Enjoy your new relationship. You are fortunate to find companionship and love again. But please, take the necessary steps to ensure that your money ends up in the right hands.