Drafting Wills for the Remarried Spouse

Forms used for the traditional marriage are not suitable for second marriages, especially when children are involved from a previous marriage. Attorneys need to make sure that their clients have updated wills that take into account the unique circumstances of a second marriage. The estate planner should educate their client about the potential conflicts between the new spouse and the children from a previous marriage. Trusts can be a helpful tool in ensuring that both the spouse and the children are provided for. It’s important for attorneys to tailor their estate plans to fit the specific needs of their clients, especially in the case of second marriages. When a parent dies and their second spouse is younger than their children, it can create complications with inheritance. One option is to give the second spouse a specific amount of money and property, with the rest going to the children. This helps avoid tension between the second spouse and the children. However, it may also lead to higher estate taxes. Another option is to use a trust called a QTIP trust, which allows the second spouse to receive income from the assets while preserving the assets for the children after the second spouse passes away. This can help avoid higher taxes and ensure that the children will eventually inherit the assets. Before 1982, remarried spouses had a hard time deciding whether to leave their assets to their new spouse or not. So, Congress made a law allowing a tax deduction for certain transfers to a surviving spouse. This is called a QTIP trust. It’s used to protect the surviving spouse from things like creditors and overspending. But for remarried couples, the trust needs to be adjusted because some features could cause problems. For example, giving the second spouse the power to change who gets the money could mess up the original plan. Also, giving the spouse the right to take out money every year could make the trust lose value over time. So, it’s important to be careful when setting up a trust for remarried couples. If a QTIP trust is included in a second spouse’s estate, the trust should bear the additional estate taxes. The trustee should not rely solely on the personal representative of the second spouse’s estate to determine the amount of taxes. Instead, the trustee should carefully review the second spouse’s estate tax return. Also, standard provisions in wills and trusts granting broad discretionary authority to trustees should be reconsidered for second marriages. Trustee decisions should not be left entirely to discretion, especially when the trustee is an institution. Trustees can sell assets without asking the beneficiaries, which can have a big impact on the trust’s income. They can also decide how to divide money between income and principal, even if it goes against the law. This can cause problems, especially in second marriages where there are different beneficiaries involved. It’s important for trustees to follow the law and not make decisions on their own. The Prudent Man and Prudent Investor Rules provide guidelines for trustees to make smart investment decisions and protect the assets of the trust. These rules require trustees to think about making money while also keeping the trust fund safe from inflation. Trustees should also spread out the investments to lower the risk. These rules are important because they give trustees a clear standard to follow and protect them from pressure from different parties. They also allow trustees to deduct administration expenses to make sure the family gets the most money. Overall, these rules help trustees make fair and wise decisions for the trust. When planning an estate for a remarried spouse, it’s important to choose a trustee who can balance the needs of the surviving spouse and the children. A corporate trustee is often the best choice because they can remain neutral.

The surviving spouse should not be the sole trustee because they may not be neutral and could make decisions that benefit them at the expense of the children. The children should also not be the sole trustees because they may be biased as well.

A family friend or corporate trustee is a better choice because they can remain neutral and make fair decisions. It’s also a good idea to have alternate trustees named in case the main trustee is unable to continue. Corporate trustees are a good option for managing a remarried spouse’s will because they have experience and are less likely to be influenced by family members. If a beneficiary wants to remove a trustee, it’s important to be cautious about giving them that power. It’s also important to clearly define terms like “children” and “grandchildren” in the will. Overall, careful drafting is needed for a remarried client’s will.

Source: https://www.floridabar.org/the-florida-bar-journal/drafting-wills-for-the-remarried-spouse/