Unfortunately, a significant percentage of marriages end in divorce. We should also point out the fact that the divorce rate for second and third marriages is higher than the divorce rate for first marriages. Most second and third marriages do not withstand the test of time.
There are a number of things to take into consideration from an estate planning perspective if you are getting divorced. Clearly, you are probably going to want to change the beneficiary designations on your insurance policies and retirement accounts. If you have a last will or a trust in place, adjustments to these documents will be called for as well.
Once you have established yourself as a single individual from an estate planning perspective, you can go forward with peace of mind until and unless you get remarried. At that point, you are going to have a new set of estate planning concerns, especially if you have children.
To protect yourself, you may want to consider the creation of a premarital agreement. Remember, most second and third marriages fail, so you may not want to let love blind you. The final decision is up to you, but these days, there need not be any stigmas attached when people are trying to protect themselves.
When it comes to your children, you may want to protect them through the creation of a qualified terminable interest property trust. This type of trust is often shortened to the term “QTIP” trust.
You could potentially obtain the best of both worlds if you convey assets into a qualified terminable interest property trust. The way that it works is you name a trustee, and you make your spouse the first beneficiary of the trust. If you pass away first, the trustee would follow instructions that you record in the trust declaration. Earnings from the trust would be distributed to your surviving spouse throughout the rest of his or her life.
Your children would be named as the secondary beneficiaries in the trust declaration. After the passing of your spouse, your children would inherit whatever remains in the trust.
You are completely protecting your children’s interests when you create a qualified terminable interest property trust, because your surviving spouse would not have the ability to access the principal or change the beneficiaries. With regard to the principal, you could allow the trustee to distribute portions of it to your surviving spouse if certain circumstances were to exist, but that would be your choice.
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If you are undergoing a change in marital status, you should certainly review your existing estate plan with the benefit of licensed legal counsel. Our firm offers no obligation consultations, and you can feel free to contact us through the following link at your convenience if you would like to set up an appointment: Hartford CT Estate Planning Lawyers.