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T&E TALK: Estate Planning Critical with a Second Marriage

Posted by Scott T. Ditman, CPA/PFS on Mar 28, 2016 1:00:00 PM
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Estate planning for second marriages presents a higher level of complexity than merely revisiting your will and making the appropriate changes. If you've been married more than once, and especially if you have children from different marriages, comprehensive estate planning becomes particularly vital.

Reviewing your will, while crucial, is really only part of the process; other documents need to be reviewed as well, including:   

Life Insurance Policies. If you have life insurance and your first spouse is the beneficiary, you may want to change the beneficiary. If you can't make this change, as is sometimes the case if you are divorced, consider buying additional life insurance that will include your new spouse. If the life insurance is in a life insurance trust, the issues can get more complex.

Retirement Plans including 401(k)s and IRAs. Many are not aware that retirement plan beneficiary designations supersede a will! In fact, there have been cases where designations were never replaced after a second marriage and the former spouse was paid a benefit.  

If there are significant funds in your life insurance and various retirement plans and the designated beneficiaries are not addressed properly, it could negatively impact on your estate plan. Your estate liquidity needs may not be met, and the assets may not go to whom you intended.

If you have questions or are ready to move forward, contact me at SDitman@berdonllp.com or your Berdon advisor.

Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.

Topics: T&E TALK

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