Estate Planning Challenges: What Happens When Your Ex-Spouse Dies?

Getting married for a second or third time can bring a lot of joy, but it can also present new challenges, especially regarding how your estate plan financially affects current and former family members from your past marriages.

An important part of estate planning is understanding under whose ownership certain assets and property are currently held, as well as how they will be allocated in the future. Updating all of your account titles and designations, such as beneficiary designations on retirement accounts and insurance policies, is a must after a marriage, whether it be marriage number one or marriage number five.

Be sure to put all of your intentions in writing, so that there are no questions about what assets are to be distributed to children from your current vs. previous marriages. For example: if you want your current family to inherit your house, you’ll need to change the names on the legal documents associated with your home. If real property is not transferred correctly, your family may become homeless or experience unintended hardship after you or your spouse dies.

Alimony is a legal obligation for one person to financially support an ex-spouse after divorce in order to maintain the lifestyle that was experienced during the marriage. As part of a divorce agreement, a judge can order for alimony to be awarded, but it must be in accordance with any state laws. When an ex-spouse dies, a financially difficult situation can arise if you rely solely on alimony for income. In an unfortunate situation like this, it is typical that your alimony payments will discontinue unless your divorce decree specifically states otherwise. You may, however, be able to file a claim with the court against the estate of your ex-spouse to receive any unpaid alimony.

The estate of your ex-spouse will go through the probate process when he or she passes away. The administrator that is appointed to oversee the estate will pay any remaining debts and allocate assets to the beneficiaries. If your ex-spouse was indebted to you for past alimony or other monies, you will become a known creditor to their estate and can therefore submit a claim for said funds that are owed to you.

Although it makes perfect sense, the concept that alimony does not typically continue once an ex-spouse passes often isn’t given much thought until the time comes. You may very well need to discover new ways to supplement your income once alimony payments cease, so it is best to be prepared for this.  Many couples, especially those who have children together, elect to include each other in their respective life insurance policies as the beneficiaries. This will ensure that the surviving ex-spouse and any children from the marriage will be cared for adequately.

If you are considering tying the knot for a subsequent time, there are many important aspects of estate planning and beneficiaries that you should have a solid understanding of. This will eliminate or lessen the amount of confusion as to what assets stay with or go to each person when an ex-spouse dies. Along with forming an estate plan can come discomfort, but having a plan in place can bring peace and comfort. To learn more about estate planning if you’re preparing to wed again, reach out to our office with any questions or to initiate a free one-hour consultation.

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