For individuals embarking on second or subsequent marriages, the prospect of protecting their estate and assets can be daunting. However, a re-married couple can find peace of mind by prioritizing asset protection. Keeping assets as separate property can safeguard them, ensuring that their children will inherit their assets in the event of divorce or death.
Attorney Christopher Heritage has extensive experience helping individuals in second marriages protect their hard-earned assets and ensure they are distributed to their intended beneficiaries. He takes time to get to know his clients and understand their needs and goals while helping them make informed, strategic decisions related to estate planning and asset protection.
Why Is Asset Protection Important for Second Marriages?
If an individual has significant assets when entering a second or third marriage, they are interested in protecting their assets because California is a community property state. In this context, community property refers to assets and debts acquired during the marriage, which are considered jointly owned by both spouses. Suppose the couple gets divorced in the future or one of the spouses faces a creditor's lawsuit. In that case, their assets will be categorized as either separate property belonging to only one spouse or community property that belongs to each spouse.
This distinction is also important when determining inheritances. Any property considered community property can be seized by creditors after a lawsuit or divided by a judge in a divorce proceeding. Using asset protection strategies, such as creating a trust or a prenuptial or postnuptial agreement, can help ensure your property is considered separate. Although it may be difficult to imagine a future divorce, it can happen.
The Benefits of Signing a Prenuptial Agreement
Signing a prenuptial agreement can be beneficial if you are getting married later in life, have significant assets, or enter a second or third marriage. Prenuptial agreements protect your assets if you get legally separated or divorced. They're also important when a spouse dies. A prenuptial agreement allows you to decide how your state will be distributed in this case.
Working with an attorney can help you negotiate a fair prenuptial agreement. The agreement should clearly state which assets each spouse has, including assets each spouse brought into the marriage and assets acquired during the marriage. Having an experienced attorney in your corner is vital to receiving private, independent, and confidential legal advice as you work toward a prenuptial agreement.
Protecting Your Assets with a Trust
Creating a trust is one of the best ways to protect your assets as you enter a second marriage. Creating a trust before your marriage can help you protect your assets from a divorce in the future, creditors from a lawsuit, and beneficiaries who may have challenges such as gambling or drug addictions. Additionally, irrevocable trusts can help you become eligible for long-term care benefits through Medicaid while protecting your assets.
After you create a trust with the help of an estate planning attorney, you will transfer ownership of your home and other assets into the trust. At that point, the trust will legally own the assets. In most cases, if you weren't the legal owner of the asset, a court can't divide and distribute the asset in a divorce.
If you've been married later in life and own significant assets, creating a trust can help you keep them and ensure they will go to your chosen beneficiaries after you pass away. For example, suppose you have children from a previous marriage. You can create a trust and designate your children as the trust's beneficiaries before you enter into a second marriage.
After your death, the trustee, a person or entity you appoint to manage the trust, will ensure your children receive the assets in the trust. Without a trust or prenuptial agreement, your assets could be distributed to your spouse's children from a previous marriage. Your children and grandchildren could be left out and not inherit your assets.
Leaving Assets to Your Current Spouse
Many individuals who enter second or subsequent marriages would like to make sure their soon-to-be spouse will receive some of their assets if they die before their spouse. Through a prenuptial agreement or trust agreement, you can designate that your new spouse will receive a percentage of your assets.
You can also give your spouse the right to live in the familial home continuously if you pass away first by including this provision in the trust agreement. Taking time to work with an attorney and prepare for the future can help you develop an estate plan that ensures all the people you care for and would like to receive your assets will receive them after you pass away.
Estate Planning for Second Marriages
Estate planning is essential in protecting your assets for your intended beneficiaries, such as your children and grandchildren. After a second marriage, the couple may need to rewrite, amend, or revoke previous estate planning documents, such as a will, a legal document that outlines how you want your property distributed after your death, or a trust, a legal arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary.
If there isn't an estate planning document, it's time to begin planning for the future with a comprehensive estate plan. Attorney Christopher Heritage can help you review and amend your estate planning documents to reflect your current needs and goals.
Contact an Experienced Estate Planning Attorney in Palm Springs
Working with an estate planning attorney who lives and works in your area is important. Attorney Christopher Heritage represents clients throughout Palm Springs in a wide range of estate planning and asset protection matters. He frequently represents clients in Palm Springs courts. If you have questions about protecting your assets in a second marriage, don't hesitate to contact Heritage Legal to schedule a free initial consultation and learn more about your options.