Estate planning for second family often gets overlooked. The irony is that these situations typically require the most planning.
In Michigan, a person who passes away without an estate plan will have her assets distributed under Michigan’s Inestate Succession statute.
This one-size-fits-all approach often misses the mark. These laws rarely take into account the issues facing a second family situation. For instance, given a choice, a spouse may choose to treat her second spouse differently depending on whether she has children from a previous marriage.
The good news is that proper planning will allow a person’s assets to be distributed in a way that he feels is fair to all his heirs. A separate trust can ensure that his assets are available to his spouse during his lifetime and then go to his children upon his spouse’s death. This is a common practice that allows people to support their surviving spouse and make sure their children receive an inheritance.
Proper planning may also include pre- or post-nuptial agreements. These are an efficient way to make sure one’s children are treated fairly upon his or her passing.
Life estates are another tool for second families and allow a surviving spouse to remain in the marital home for his or her life no matter whom the owner of the house may be.
In a second marriage, these issues and many others should be discussed and considered with an estate planning professional.