People who want to create or review their estate plan will always want to do so with an eye on their current situation and any changes that may have taken place or that may be on the horizon. These changes may pertain to their assets or debts, such as the purchase of a new asset or a dramatic change in value of another asset. Other changes may involve the birth or death of a beneficiary. A new marriage is another event that requires careful assessment when it comes to an estate plan.
As explained by Forbes, when a person gets married for the second or subsequent time and they bring children from a prior relationship into their new marriage, they should be clearly aware of the different lens through which their new spouse and their biological children will view their rights to an inheritance.
If a person dies with no will or trust in place, a surviving spouse may inherit assets according to state law. That spouse, however, is not obligated to share or pass on any assets to their deceased spouse’s children. Similarly, if a person’s will grants an inheritance to a spouse and the spouses agreed that assets would eventually flow to the first person’s children, the surviving spouse is still not legally obligated to do this.
Policy Genius notes that a qualified terminable interest property trust, also called a QTIP trust, may well help people in this situation. This type of trust sets up the surviving spouse as a lifetime beneficiary, so they receive income from the trust assets. The children would be named the remainder beneficiaries, so they receive all trust assets upon the death of the surviving spouse.