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Texas Tech Univ. School of Law

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Friday, August 31, 2012

Book on Estate Planning for Second Marriages

Estate Planning For Second MarriagesStephanie B. Casteel (Attorney, Georgia) & Eric A. Manterfield (Partner, Indiana) recently published a book entitled, Estate Planning for Second Marriages, (2011).The description of the book is provided below:

Many married couples you represent will be in a second (or subsequent) marriage and will have children from a prior marriage. Although there are certainly exceptions to this general rule, it is still unusual for clients to adopt the children of their new spouse. With this reason, the couple frequently tells you about “his” children, “her” children and, perhaps, “their” children.

Unlike the typical couple involved in a first marriage, couples involved in a second marriage frequently have substantial assets in their individual names alone. Although there certainly can and will be jointly held property, the existence of substantial assets in the sole name of each spouse may be significant. Joint property generally passes to the surviving joint owner at the death of the first spouse. Life insurance and retirement benefits will pass to the surviving spouse if he or she is named as the beneficiary.

Many couples in a second marriage want their individually owned assets to pass to their children from a prior marriage, either when the first spouse dies or at the death of the surviving spouse. They may want the couples’ assets to pass to the two families after the death of the surviving spouse. This transfer will not occur in accordance with the couples’ wishes without careful estate planning.

Estate Planning for Second Marriages helps attorneys handle these blended family situations, in which each spouse has children from a prior marriage and each spouse wishes to protect his and her individual assets for their respective children from the prior marriage. The couple also hopes to provide for the survivor, or if a divorce occurs, to provide for an orderly, predictable and conflict-free distribution of assets. The couple also hope to make use of the tax advantages available to married couples, such as filing joint income tax returns or making split gifts, in a mutually advantageous, systematic, fair, and transparent, way.

Casteel and Manterfield cover:

  • Prenuptial and Postnuptial agreements
  • Managing asset distribution
  • Whether and how one spouse can control the other spouse's use of separate property
  • What specific gifts are desired even when the first spouse dies
  • The ethical constraints involved in representing the couple 

The text contains numerous practice pointers such as:

Although many clients who own sole title to the “marital” residence wish to permit the other spouse to reside there, the real world restrictions which that spouse wishes to impose make the drafting and later administration of this type of trust very difficult.

A Qualified Personal Residence Trust (QPRT) could purchase the marital residence from the husband who owns the property. The QPRT provides the husband and wife with respective life estates, for the life of the survivor of the couple. The Trust terminates to provide a remainder interest for the benefit of the husband’s children. All those benefitting from this Trust contribute amounts that reflect their respective actuarial interests in the Trust.

http://lawprofessors.typepad.com/trusts_estates_prof/2012/08/book-on-estate-planning-for-second-marriages.html

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