Remarriage: Protect your family by avoiding common pitfalls
Although spring may feel like a long way off, it will be here soon. And on its heels will come the summer wedding season. But wedding season is not just for blushing brides and their nervous young grooms. Often called an “encore marriage,” many seniors marry again after a divorce or the death of their first spouse. In the rush of excitement that comes with a new relationship, many seniors overlook the legal implications of tying the knot again.
We have all heard stories about Betty and Bob, who were married for 55 years and had four children and many happy years together. Betty passed away and Bob moved to assisted living and soon met Charlene, who has three children. They were married shortly thereafter, and when Bob died, Charlene ended up with the farm. And when Charlene died, the farm passed to her three children. Ruined relationships and years of legal battles followed. A well thought out estate plan could have avoided this outcome.
There are three life events that can bring unintended consequences into an encore marriage. The first is if one spouse must move into long-term care. Does the couple understand how they will pay for it and how the Medicaid eligibility rules work in their situation if they run out of money? Will wife’s farm need to be sold to pay for husband’s nursing home bill? Will wife be able to keep her cash rent? Would they have even gotten married if they had answers to these questions ahead of time? And who should wife appoint in her financial power of attorney to act as her financial agent if she is no longer able to manage her affairs – her new spouse, or one of her children?
The second life event that can bring unintended consequences into an encore marriage is if the couple decides to divorce. This is especially important because many studies indicate second and third marriages are more likely to end in divorce than a first marriage. How will the property be divided? Will wife end up with husband’s lake home? Will husband walk away with some of wife’s minerals? The easiest way to address this issue is for the couple to sign either a prenuptial agreement before the marriage or a marital agreement after the marriage. The agreement should state exactly how the property will be divided in the event of a divorce.
The third life event bringing unintended consequences into an encore marriage is the death of a spouse. Many couples believe they have planned for this issue by making clear in their estate planning their assets are to go only to their respective children. However, the law in North Dakota gives a surviving spouse who received nothing from their deceased spouse at death the right to claim 50% of the deceased spouse’s assets; this essentially means you cannot truly disinherit your spouse. The only way to make sure your spouse does not try to claim 50% of your estate is to have each spouse waive this right. This can be done by signing either a prenuptial agreement before the marriage or a marital agreement after the marriage.
A strong and enforceable marital agreement in North Dakota should be in writing and should include a full financial disclosure from each spouse. Both spouses should be represented by separate attorneys and neither spouse should be under duress to sign it. The specific terms of the agreement will vary by couple but should address the division of assets upon death or divorce.
Ideally, “remarriage protection” should be accomplished in estate planning done during your first marriage. Many couples decide to leave certain assets for their surviving spouse in a trust for the spouse’s lifetime, with terms so the surviving spouse cannot leave the trust assets to a second spouse or lose them in a later divorce. For example, if husband dies, his assets are transferred to a “family trust” for his wife’s benefit. However, if she remarries, she must sign a prenup with her new spouse where he waives his right to the “family trust” assets. If wife fails to sign a prenup with her new husband, she loses access to the “family trust” assets and they are immediately distributed to her children.
Many couples bristle at this type of planning, vowing never to remarry if their spouse passes away. Some worry that this type of planning shows distrust for their life-long spouse. However, as more and more families end up in situations like Betty and Bob’s family described above, the importance of this type of planning becomes apparent. The ideal time for a senior to ask for legal advice is well in advance of tying the knot again because the best way to truly enjoy an encore marriage is to know you have dotted the i’s and crossed the t’s by considering these issues.
This article does not constitute legal advice. Each individual should consult his or her own attorney.